Halved, then halved again, and then halved once more….
Since 2022, Shinsegae International's operating profit has steadily declined, but the company has changed course. It is focusing more on beauty than fashion and looking overseas rather than at the domestic market to improve results. To that end, Shinsegae International reorganized its structure starting in September last year. Many analysts say the effects have been showing since the first quarter of this year.
According to the retail industry on the 20th, Shinsegae International posted an operating loss of 11.5 billion won last year. As recently as 2022, Shinsegae International's operating profit was 115.3 billion won, and operating profit was 48.7 billion won in 2023 and 26.8 billion won in 2024. As the decline in operating profit continued, Shinsegae International began to pursue changes from September last year. It replaced the incumbent CEO, who had been recruited to strengthen the overseas luxury business, before the end of the term. CEO Kim Deok-ju of Shinsegae International took the helm of a newly organized structure and shifted to a system of separate CEOs by institutional sector.
The most notable keywords in this shift are beauty and overseas. Until now, Shinsegae International generated revenue by bringing popular domestic fashion brands and overseas fashion brands into Korea. During the COVID-19 period, demand for luxury goods grew, and results were strong. But recently it has pivoted to pursue growth in beauty rather than fashion and in overseas markets rather than the domestic market.
A retail industry official said, "Eighty percent of Shinsegae International's sales come from the fashion business, but the company has decided to focus on growing its beauty business," adding, "It has split the cosmetics division into basic skincare and color cosmetics and is pursuing a market expansion strategy across the two."
In basic skincare, Shinsegae International is focusing on expanding the lineup of "Yeonjak." Yeonjak is a basic skincare brand introduced by Shinsegae International in 2019. A product called "Base Prep" is particularly well known, and on the 16th the company expanded the number of SKUs. A Shinsegae International official said, "It is a product that smooths skin texture before makeup to enhance longevity and adherence, and by launching a new Face Prep product, we have strengthened consumer choice," adding, "Buoyed by these changes, we expect Yeonjak's sales this year to grow by double digits from a year earlier."
In color cosmetics, the company is strengthening the VIDIVICI brand. VIDIVICI rebranded in April last year and plans to target the Chinese, Japanese and U.S. markets this year. Black Perfection Cover Fit Cushion and Skin Illumination are its flagship products. AMUSE, acquired in 2024, plans to broaden its footprint in Europe, starting with France.
Brokerages are also giving positive assessments of Shinsegae International's moves. Since 2023, target prices had mostly been trending lower, but the tone has shifted slightly. In March 2023, analyst Kim Hye-mi at Sangsangin Investment & Securities issued a report saying, "We are lowering the target price due to the negative of ending sales of key overseas brands with high recognition," and in September 2024, analyst Jeong Ji-yoon at NH Investment & Securities said, "Weak fashion business due to deteriorating consumer sentiment affected overall results," while lowering the target price.
But starting this year, target prices have been rising again. Daishin Securities set a target price of 15,000 won, saying, "From the fourth quarter of 2025, the direction of results is changing," and "The recovery trend continuing into early 2026 could serve as a catalyst for a shift in market perception."
DB Securities analyst Heo Je-na also raised Shinsegae International's target price from 12,000 won to 14,000 won. Heo said, "I view it positively as inefficient stores centered on domestic brands such as G-cut are being closed, and new overseas brands such as The Row and Courrèges are gaining a foothold."