Promise to Strengthen Core Business Competitiveness at Regular Shareholders' Meeting
Three New Stores to Open This Year, Focusing on Customer Attraction and Sales Growth
Quick Commerce Expansion and Cost Efficiency Measures Also Presented
Commitment to Profitability Improvement by 2027
Emart, the leading large-scale retailer, plans to accelerate its external growth by expanding new store openings with the goal of achieving an operating profit of 1 trillion won by 2027.
Han Chaeyang, CEO of Emart, attended as the chairperson at the 14th regular shareholders' meeting held on the 26th at Post Tower in Chungmuro, Jung-gu, Seoul, stating, "Through continuous innovation in our core business, we will create overwhelming results compared to competitors and firmly maintain market leadership."
In December last year, Emart opened a specialized store, Food Market Suseong Branch, in Suseong-gu, Daegu, focusing on a year-round lowest price strategy for groceries, marking its first new store opening in three years. Last month, it opened its 23rd warehouse discount store, Traders, in the Magok district of Gangseo-gu, Seoul. In the first half of this year, Food Market Godeok Branch and Traders Guwol Branch are scheduled to open in the second half.
Since the COVID-19 pandemic began in 2020, the number of stores (including Traders) has decreased from 160 to 154 as of the end of last year due to continuous closures. This year, Emart plans to expand its footprint by opening three new stores, including large-scale marts and warehouse discount stores, focusing on attracting customers and increasing sales.
CEO Han said, "We will actively expand stores, which are the foundation of operations and growth drivers, in various formats such as Traders and Food Market by reviewing key factors such as commercial district size, location, and profitability," promising shareholders, "We will renew stores with low asset efficiency into new business models like mall-type and Food Market to strengthen customer attraction and boost sales."
Considering the market situation where online-centered consumption culture and fast delivery are key topics, Emart plans to gradually expand delivery services such as 'quick commerce' (delivery within one hour) utilizing existing store assets.
Han Chaeyang, CEO of Emart, is giving a greeting speech at the 14th Emart Annual General Meeting of Shareholders. Photo by Emart
Emart will also pursue store innovation and cost reduction measures to improve profitability. CEO Han emphasized, "Instead of purchasing products separately by business type?large marts (Emart), warehouse discount stores (Traders), supermarkets (Emart Everyday), and online (Gmarket·SSG.com)?we will switch to an integrated purchasing system, realizing 'economies of scale' with a 1.7 times increase in single purchase volume. Through this, the cost savings will be reinvested in prices, creating a virtuous cycle where customer numbers increase and sales expand." He also presented plans to expand organizational consolidation initiated last year and to increase productivity by introducing new technologies such as big data and artificial intelligence (AI).
CEO Han pledged, "Emart will achieve a consolidated operating profit of 1 trillion won by 2027 and increase shareholder returns through profit improvement," adding, "We will raise the minimum dividend and enhance shareholder value through measures such as the cancellation of treasury shares held by the company." Earlier, Emart announced a corporate value enhancement plan last month, raising the minimum dividend per share from 2,000 won to 2,500 won and deciding to cancel a total of 560,000 treasury shares (2% of total shares) over this year and next year, 280,000 shares each year. An additional 13.4 billion won will be invested annually to increase the dividend amount.
Meanwhile, at the shareholders' meeting, agendas including approval of financial statements and consolidated financial statements, appointment of inside and outside directors, appointment of outside directors as audit committee members, appointment of audit committee members, and determination of director remuneration limits were approved. However, the agenda to disclose the corporate value enhancement plan proposed by the minority shareholder action platform 'ACT' and the Economic Reform Solidarity was rejected.
Prior to the meeting, these groups newly proposed the agenda to disclose the corporate value enhancement plan and submitted shareholder proposals opposing the current director remuneration limit of 7 billion won. They argued, "There is virtually no governance-related matter, which is key to value-up," and stated, "The intention is to 'recommend' the board to re-disclose the value-up plan and disclose quarterly implementation status, urging management to exercise maximum discretion to implement the value-up plan." They also added, "Since shareholders have significant concerns about executive compensation, it is necessary to include a review and reestablishment of the compensation system in the plan."
However, the Governance Advisory Committee, an independent body under the Korea Listed Companies Association, opposed this agenda, stating, "It is not a matter within the authority of the shareholders' meeting as defined by the Commercial Act or the articles of incorporation," and "The meaning of the advisory effect is unclear, so we oppose it."
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