Shinsegae to close whisky business to focus on profits

Shinsegae Inc., South Korea’s largest department store and supermarket company, will pull out of the whisky market, bucking the trend of the rapidly growing demand for spirits, as it shifts its focus toward profitability over external growth.

Shinsegae L&B, under the supermarket chain operator E-Mart Inc., recently decided to disband its whisky business unit, according to company officials on Thursday.

The decision came as its mainstay business -- wine import and distribution – is reeling from declining sales amid the economic slowdown.

Shinsegae L&B swung to a net loss of 10.4 billion won ($8 million) in the first nine months of this year, with sales down 10% to 135.7 billion won over the same period.

Wine makes up the lion’s share of 70% of its revenue.

In a New Year’s message delivered on Thursday, Shinsegae Group Vice Chairman Chung Yong-jin said that 2024 will be more challenging than ever and the company must deal with harsh realities.

“We must give a clear answer to the question of whether we are first (in the retail market) in 2024.”

He stressed that profitability should come first when it makes strategic decisions, including entering new sectors, over business expansion.

Last month, he urged its employees to change the organization, system and even work methods in a meeting of the Management Strategy Office, the group’s control tower.

In September, the country's No. 10 conglomerate carried out one of its most drastic executive reshuffles, replacing nine chief executives at its subsidiaries.

Write to Young-Chan Song at 0full@hankyung.com
 


Yeonhee Kim edited this article.