Ex-CEOs return to firms in Korea for operational stability

Former chief executives of South Korean firms are being recruited by their previous employers as the companies need the seasoned experience of these experts, mostly in their 60s and 70s, for operational stability while earnings decline in an economic downturn.

The recent ex-CEO returns have taken place in the food and beverage (F&B) and retail industries, more than in other sectors.

Kyochon F&B Co., a major fried chicken franchise, named its former CEO Song Jong-hwa as vice chairman on Sept. 20. Song, 63 years old, served as an executive and CEO at Kyochon from 2003 and 2012 when the Korean poultry industry was hit hard by avian influenza.  

He led Kyochon’s entry in the US and China and the launch of the company’s bestseller Honey Chicken, fried chicken sweetened with honey sauce.

The company is facing a critical juncture amid the economic downturn and consumption slump and is expecting Song’s leadership to serve as a springboard for its resurgence, Kyochon stated on Wednesday.

Retail giant Shinsegae Inc. tapped former Starbucks Korea CEO Lee Seok-koo as the new head of Shinsegae Live Shopping in its executive reshuffles on Wednesday. The 74-year-old chief’s most recent role was head of Shinsegae’s New Growth Promotion Committee.  

He served as CEO of Starbucks Korea, operated by Shinsegae’s supermarket chain E-Mart Inc., from 2008 to 2019. Lee introduced the drive-through concept and prepaid card to the No.1 coffee franchise in the country.

Starbucks Korea became a dominant player in the crowded market, posting 1.5 trillion won ($1.1 billion) in revenue with 1,262 stores in 2018, compared with 171 billion won with 270 stores in 2008.

F&B behemoth SPC Group appointed Do Se-ho as BR Korea's vice president in August. The 65-year-old leader is a former chief of  BR Korea, SPC’s affiliate that operates the US ice cream chain Baskin-Robbins in Korea.   

The companies expect the previous chiefs to bring financial health back through operational stability, rather than aggressive expansion of businesses.

BR Korea’s operating profit dropped 57.2% on-year to 33.9 billion won in 2022, while Shinsegae Live Shopping’s profit declined 50.5% to 13.9 billion won in the same period.

Kyochon faced a backlash from consumers after raising prices of main chicken products by up to 3,000 won in April, which is around 18% of the previous prices. Some online communities called for a boycott of the chicken franchise as the price hike took place 17 months after an 8.1% rise in November 2021.

Write to Ji-Yoon Yang at yang@hankyung.com

Jihyun Kim edited this article.