Profit dive leads Ministop to uncertainty
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The future ownership of South Korea’s fourth-largest convenience store chain, MiniStop Korea, is uncertain with options under review.
Parent Aeon Group of Japan is apparently tiring of falling profits from the chain and has appointed Nomura Securities to explore sale options, including a clean sale of its stake or attracting a strategic investor.
With more than 2500 stores spread across South Korea, MiniStop’s sales reached 1.18 trillion won (US$1 billion) last year.
In a statement issued this week, Aeon said: “Even though we are considering business tie-ups with other companies to improve corporate value, there are no concrete plans on selling off MiniStop Korea yet.”
Aeon currently owns 76.06 per cent of MiniStop Korea with local Daesang Group holding 20 per cent and Japan’s Mitsubishi the remaining 3.94 per cent.
Intense local competition is behind the decline in MiniStop Korea’s profitability, according to local industry sources. Profit plunged 23 per cent last year to 2.6 billion won (US$2.3 million). In 2015 the company achieved an operating profit of 13.2 billion won.
Questions & Answers
Q.What is the primary reason for MiniStop Korea's current struggles?
What is the primary reason for MiniStop Korea's current struggles?
Intense local competition in South Korea has been identified as the main cause for the decline in MiniStop Korea's profitability. This competitive pressure led to a significant drop in its profit last year.
Q.What proportion of MiniStop Korea does the parent company Aeon Group currently own?
What proportion of MiniStop Korea does the parent company Aeon Group currently own?
Aeon Group, the Japanese parent company, holds a 76.06 per cent stake in MiniStop Korea. This makes them the majority owner, with other shareholders holding smaller percentages.
Q.How much did MiniStop Korea's profit fall last year, and what was its value?
How much did MiniStop Korea's profit fall last year, and what was its value?
MiniStop Korea's profit plunged by 23 per cent last year, reaching 2.6 billion won. This figure is significantly lower than the operating profit achieved by the company in 2015.
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