1. Shinsegae’s H1 2025 Performance: What Happened?

Shinsegae’s revenue in H1 2025 decreased by 48.8% year-on-year to KRW 3.36 trillion. Operating profit and net income also declined by 25.9% and 64.2%, respectively. The downturn in the duty-free business significantly impacted the overall weak performance.

2. Analyzing the Slump: Why These Results?

  • Duty-free struggles: The delayed recovery of international tourism and intensified competition led to substantial losses in the duty-free business.
  • Weakened consumer sentiment: High interest rates and an economic slowdown dampened consumer spending, impacting department store and retail sales.
  • Increased debt: Rising debt levels due to increased borrowing added to Shinsegae’s financial burden.

3. Shinsegae’s Future: What’s Next?

Despite the challenges, Shinsegae possesses several positive factors:

  • Department store strength: A strategy focused on strengthening luxury and premium offerings has sustained growth in the department store segment.
  • New business investments: Investments in digital transformation and new ventures are securing future growth drivers.
  • Real estate/hotel stability: The real estate and hotel businesses provide stable income, mitigating overall performance volatility.

4. Action Plan for Investors: What Should You Do?

Investing in Shinsegae requires considering both short-term uncertainties and long-term growth potential. Careful investment decisions should be made while monitoring the following:

  • Duty-free recovery: Watch for the pace of international tourism recovery and Shinsegae’s competitiveness strategy in this segment.
  • Shifts in consumer sentiment: Monitor how consumer spending evolves in response to interest rate changes and economic recovery trends.
  • Financial health management: Track Shinsegae’s debt reduction efforts and the impact of interest rate fluctuations on interest expenses.