Shinsegae, E-Mart seek structural improvements

The last few years have been hard for retailers such as Shinsegae and E-Mart.

Shinsegae is a department store franchise that owns the world’s largest department store in Centum City, Busan, and E-Mart is the largest retailer in Korea. They both enjoyed their heyday until 2010, when customers started moving more and more towards shopping online.

But the department store franchise and retail giant refused to face the reality and kept focusing on their offline platforms until they reached the point where revenues had plunged and operating profits turned into record deficits.

Wednesday’s general meetings for Shinsegae and E-Mart showed their will to seek change in their business reflecting the market’s demand and needs. Shinsegae will stick to its three-executive-director management system with only new CEO Cha Jeong-ho replacing former CEO Jang Jae-young.

Cha was CEO for Shinsegae’s subsidiary Shinsegae International and he successfully led that firm. In particular, he made the cosmetic label “Vidi Vici” into a global brand and achieved turnaround for the firm’s cosmetic business.

Cha is also praised for equally improving the fashion and lifestyle business and leading them to the global market.

Shinsegae International has well positioned itself for the future and it’s time for Cha to discover a new growth engine for Shinsegae.

Cha chose to erect a new department store in Daejeon that he hopes will become an iconic outlet in the central region of the country. “Daejeon Science Complex” is set to open next year and will offer a variety of lifestyle experiences, from shopping, science, culture and nature, and is designed to be a new model for the future of the department store.

Cha has also started reimagining concepts of existing department stores in the country to give local customers what they want.

For instance, the Shinsegae department store in Yeongdeungpo learned that the bulk of their sales revenue came from the grocery department and as a result decided to relocate the food market to the first floor.

Previously, all department stores stationed luxury cosmetics on the first floor to entice female customers, who would be led to shop for clothing on the second floor.

The Youngdeungpo branch also opened a new street fashion space on the first floor to satisfy younger customers’ tastes.

Cha said he will introduce customized shopping spaces at nine more department stores.

Two other executive directors Kweon Hyeok-goo and Kim Jungsig will continue to serve their consecutive terms together with Cha.

Kweon and Kim are acknowledged for their stable business management while expanding the duty free businesses in Daegu, Hanam, Kimhae and Myeongdong.

Last year, Shinsegae department store became the very first local outlet to record 2 trillion won revenue, which is a notable achievement amid the shrinking offline retail market.

E-Mart also appointed new executive director Kang Heui-seok, who will start a new electricity charging business for cars.