E-Land shutters stores as profit tumbles
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South Korean retail giant E-mart is closing loss-making specialty stores as it responds to falling sales in a gloomy retail market.
After closing outlets in its discount Pierrot Shopping network in July, the company is now looking at trimming the network further.
“We’re considering closing the Pierrot Shopping store in Myeong-dong in order to enhance the profitability of specialty stores,” an E-mart official told The Korea Times.
The company has also closed 18 out of its 33 Boots health & beauty stores and the Pangyo branch of its technology-retailing chain Electro Mart.
E-Land launched Boots under license in 2017 to take on CJ Group’s market-leading chain Olive Young, but the brand has made a little impact to date.
E-mart’s profit fell from 194.6 billion won (US$166 million) in the third quarter of last year to 116.2 billion won ($97.2 million) in the same period this year.
Analysts predict incoming CEO Kang Heui-seok will continue to rationalize store networks and focus on the group’s burgeoning online business SSG.com.
“E-mart will accelerate is business transformation under Kang’s leadership, as the CEO has extensive retail experience and ability to drive growth” an HI Investment & Securities analyst told The Korea Times.
“The company will seek to recover its profitability by minimizing unprofitable businesses and focusing more on the online sector, SSG.com.”
Questions & Answers
Q.Which specific E-mart store networks are being reduced due to profitability issues?
Which specific E-mart store networks are being reduced due to profitability issues?
E-mart is closing outlets within its discount Pierrot Shopping network and has already shut down 18 of its 33 Boots health & beauty stores. The Pangyo branch of its technology-retailing chain Electro Mart has also been closed.
Q.How significantly did E-mart's profit decline year-on-year in the third quarter?
How significantly did E-mart's profit decline year-on-year in the third quarter?
E-mart's profit decreased from 194.6 billion won (US$166 million) in the third quarter of last year to 116.2 billion won ($97.2 million) in the same period this year, representing a substantial fall.
Q.What is the new CEO Kang Heui-seok expected to prioritise for E-mart's future strategy?
What is the new CEO Kang Heui-seok expected to prioritise for E-mart's future strategy?
Incoming CEO Kang Heui-seok is expected to continue rationalising store networks and focus on enhancing the group's growing online business, SSG.com. This strategy aims to recover profitability by minimising unprofitable operations.
Q.What was the initial goal when E-Land launched the Boots brand in South Korea?
What was the initial goal when E-Land launched the Boots brand in South Korea?
E-Land launched Boots under license in 2017 with the aim of competing against CJ Group’s market-leading chain, Olive Young. However, the Boots brand has made little impact since its introduction.
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