Emart, Shinsegae I&C sell stakes in live commerce unit to Shinsegae Inc Sales seen as part of Korean retail conglomerate’s ownership restructuring
Translated by Ryu Ho-joung 공개 2022-03-07 08:10:09
이 기사는 2022년 03월 07일 06:50 thebell 에 표출된 기사입니다.
Shinsegae Group’s Emart and its subsidiary Shinsegae Information & Communication have sold their entire stakes in Shinsegae Live Shopping to Shinsegae Inc, a move seen as part of the South Korean retail conglomerate’s ongoing ownership restructuring.Shinsegae Inc, the conglomerate’s department store chain, has purchased 47.8% and 28.3% stakes in the live commerce unit from Emart and Shinsegae I&C respectively for a total of 225.5 billion won ($186 million), the company said on March 3.
Shinsegae Live Shopping, which sells products via live shows, recorded a net profit of 23.6 billion won on revenue of 230.9 billion won in 2020, turning profitable from 2019 when it delivered a net loss of 3.5 billion won.
The transaction follows Shinsegae Group vice chairman Chung Yong-jin’s sale of his 52.08% stake in Gwangju Shinsegae to Shinsegae Inc in September last year, as the family-controlled conglomerate continues its ownership restructuring as part of its succession planning.
Under the succession plan, Chung Yong-jin, the son of the conglomerate’s chairwoman Lee Myung-hee, leads Shinsegae’s supermarket chain Emart and its online retail operations while his sister, Chung Yoo-kyung, leads the conglomerate’s department store chain.
Shinsegae Inc said in Thursday’s filing that the stake purchase was to diversify its business by strengthening its digital capabilities. Shinsegae Live Shopping’s annual transaction volume amounts to 1.1 trillion won, with about one billion visits to its website a year.
“With this transaction, we will further step up efforts to speed up digital transformation and expansion of our online business,” an official at Shinsegae Inc said.
Consumer products such as beauty items, clothes and home appliances account for a large share of Shinsegae Live Shopping’s revenue. This suggests a strong potential synergy with Shinsegae Inc’s department store business.
Emart is also focusing on expanding its ecommerce business, with its two online retail units – SSG.com and Gmarket Global, formerly eBay Korea – leading the effort. The sale of its stake in Shinsegae Live Shopping is expected to free up cash to invest in ecommerce logistics.
Last year Emart spent trillions of won on its acquisitions of eBay Korea and Starbucks Coffee Korea. It closed the fourth quarter of 2021 with cash, cash equivalents and short-term investments of about 1.75 trillion won on a consolidated basis and 120 billion won on a non-consolidated basis. (Reporting by Hyo-beom Lee)
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