Halved, halved again, and then halved once more….
Shinsegae International, whose operating profit has steadily declined since 2022, has changed course. It is pushing beauty over fashion and looking overseas rather than at home to improve results. To that end, Shinsegae International reorganized its structure starting in September last year. Many analyses say the effects have begun to show from 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 sought change starting in 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 with separate CEOs for each institutional sector.
The most notable key words in this shift are beauty and overseas. Until now, Shinsegae International earned revenue by bringing popular domestic fashion brands and overseas fashion brands into Korea. During the COVID-19 period, demand for luxury goods rose and results were strong. Recently, however, it has turned to seek growth in beauty rather than fashion and in overseas markets rather than the domestic market.
A retail industry official said, "Sixty percent of Shinsegae International's sales come from the fashion business, but it has decided to focus on building up its beauty business," adding, "The cosmetics division has been split into two—basic skincare and color cosmetics—to pursue a market expansion strategy."
In the basic skincare institutional sector, Shinsegae International is focusing on expanding the lineup of "Yunjac." Yunjac is a basic skincare brand that Shinsegae International unveiled in 2019. A product called "Base Prep" is particularly well known, and on the 16th the company increased the number of SKUs. A Shinsegae International official said, "It smooths skin texture before makeup to boost longevity and adherence, and by launching new Face Prep products we have expanded consumer choice," adding, "Buoyed by these changes, we expect Yunjac's sales this year to grow by double digits from a year earlier."
In color cosmetics, the company is strengthening the VDIVOV brand. VDIVOV underwent new branding in April last year and plans to move to capture 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 widen its stride in the European market, starting with France.
Brokerages are also giving positive assessments of Shinsegae International's moves. Since 2023, the trend had been to cut target prices, but the direction has shifted a bit. In March 2023, analyst Kim Hye-mi at Sangsangin Investment & Securities issued a report saying, "We are lowering the target price because of the negative factor of ending sales of key overseas brands with high recognition," and in September 2024, analyst Jeong Ji-yoon at NH Investment & Securities said, "Weak consumer sentiment dragged down the fashion business, which affected overall results," while lowering the target price.
But this year, target prices are rising again. Daishin Securities set a target price of 15,000 won, saying, "Starting in the fourth quarter of 2025, the direction of results is changing," and "The recovery trend that continues into early 2026 could be a catalyst for a shift in market perception."
Analyst Heo Jena at DB Securities also raised Shinsegae International's target price to 14,000 won from 12,000 won. Heo said, "I view it positively as inefficient stores centered on domestic brands like Jigott are being closed, and new overseas brands such as The Row and Courrèges are gaining a foothold."