E-mart names out­sider as new CEO amid down­turn

The Korea Times - - BUSINESS - By Kwak Yeon-soo [email protected]­re­atimes.co.kr

For the first time in its 26-year history E-mart has named an out­sider as its new CEO, the com­pany said Mon­day.

Shin­segae Group’s dis­count store chain said Kang Heui-seok will re­place out­go­ing CEO Lee Gap-su who has stepped down from the role, tak­ing re­spon­si­bil­ity for the chain’s poor per­for­mance.

The bold de­ci­sion came af­ter Korea’s lead­ing dis­count chain op­er­a­tor plunged into the red in the sec­ond quar­ter amid in­ten­si­fy­ing com­pe­ti­tion from on­line shop­ping ri­vals and e-com­merce giants.

The com­pany swung to an op­er­at­ing loss of 29.9 bil­lion won ($24.6 mil­lion) in the April-June pe­riod, its first quar­terly loss since its in­cep­tion in 1993.

Kang had pre­vi­ously served as a part­ner of Bain & Com­pany Seoul and Shang­hai of­fices since 2005, lead­ing con­sumer prod­ucts and re­tail prac­tices.

Be­fore join­ing the global con­sult­ing firm, he had worked at the Min­istry of Agri­cul­ture, Food and Ru­ral Af­fairs as a di­rec­tor. At the min­istry, he built the ca­pac­ity to deal with in­ter­na­tional trade ne­go­ti­a­tions.

E-mart ex­plained that Kang’s ex­ten­sive re­tail ex­pe­ri­ence and abil­ity to drive growth at some of the world’s most suc­cess­ful brands equips him to lead the com­pany dur­ing this crit­i­cal time.

“E-mart’s per­son­nel reshuf­fle was car­ried out based purely on per­for­mance,” a Shin­segae Group of­fi­cial said. “As the com­pany lies in a crit­i­cal pe­riod for read­just­ment, we sought dras­tic change and in­no­va­tion.”

Kang’s im­me­di­ate fo­cus will be on ac­cel­er­at­ing E-mart’s busi­ness trans­for­ma­tion.

That will in­clude im­prov­ing the shop­ping ex­pe­ri­ence for cus­tomers both on­line and in stores, boost­ing the range of mer­chan­dise and re­view­ing the group’s cost struc­ture and as­set base.

The dis­count chain op­er­a­tor will di­vide its prod­uct depart­ment into two cat­e­gories — gro­ceries and non­food items — to en­hance prod­uct ex­per­tise. It will also re­form the fresh food cat­e­gory to strengthen its cri­te­ria and en­sure fresh­ness.

In ad­di­tion to ex­pand­ing the sourc­ing busi­ness, E-mart has de­cided to in­te­grate the func­tion of over­seas sourc­ing with Traders, Shin­segae’s ware­house-style su­per­mar­ket.

Kang is a grad­u­ate of Seoul Na­tional Univer­sity with a bach­e­lor’s de­gree in law and a mi­nor in eco­nom­ics. He earned his MBA from the Whar­ton School of the Univer­sity of Penn­syl­va­nia.

In­vestors em­braced the move, push­ing shares in E-mart more than 0.5 per­cent higher af­ter the com­pany an­nounced its new CEO.

Apart from E-mart, Shin­segae Group also ap­pointed Han Chaeyang, who had been CFO of Shin­segae, as new CEO of Shin­segae Cho­sun Ho­tel.

The re­main­ing lead­er­ship changes will be an­nounced in De­cem­ber, it said.

Chung Yong-jin Shin­segae Group vice chair­man

Kang Heui-seok new E-mart CEO

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