Shinsegae, one of South Korea’s largest retail groups, has reported its net profit fell 99.8 per cent year on year as the Covid-19 crisis effectively shut down the nation’s tourism industry and caused local consumers to stay home.
The conglomerate, whose subsidiaries include E-mart big-box stores, convenience stores, homewares, fashion, beauty and a duty-free retail division, reported a March quarter net income of 1.6 billion won (US$1.3 million) on sales of 1.2 trillion won ($976 million).
With a ban on inbound visitors from Mainland China during part of the period, Shinsegae’s duty-free business was hardest hit by Covid-19. Sales fell 30.5 per cent to 488.9 billion won ($398 million) and the division lost 32.4 billion won ($26.4 million). Sales through airport duty-free outlets slumped by 40 per cent and of downtown duty-free stores by 21 per cent year on year.
The E-mart business, which is also listed and releases its own financial results, had earlier reported an operating profit of 48.4 billion won ($39.4 million) in the March quarter, reversing a loss of 100 million won ($81,000) in the preceding three months. The company said its sales had benefited from consumers moving online and increased grocery demand while people cooked or ate at home instead of dining out.
Sales of 5.2 trillion won ($4.2 billion) were up 13.6 per cent year on year.
Shinsegae’s department-store business saw sales fall 11.7 per cent. The company’s furniture and homewares chain Casamia saw sales rise 23.8 per cent due to network expansion, but additional costs contributed to a more than doubling of its loss to 2.7 billion won ($2.2 million).
Sales at fashion and cosmetics group Shinsegae International fell 11.6 per cent, but the division turned an operating profit of 12 billion won ($9.8 million).