Hyundai Department Store(069960)'s department store institutional sector sales in the second quarter of this year hit a record high for a quarter. The rise was driven by increased sales of luxury goods and fashion, as well as a surge in spending by foreign tourists.
Hyundai Department Store said on the 5th that second-quarter net sales in the department store institutional sector were 643.8 billion won, up 9.1% from a year earlier. It was the highest second-quarter performance. Operating profit jumped 58.6% to 110.1 billion won. First-half net sales also rose 8.3% to 1.2764 trillion won, marking a record for a half year, and operating profit increased 47.7% to 246 billion won.
Foreign-customer sales lifted results. In the first half, foreign-customer sales at The Hyundai Seoul rose 134% from a year earlier, and at the Trade Center branch they increased 131%. At both stores, foreigners now account for around 20% of total sales. Hyundai Department Store said, "In the case of The Hyundai Seoul, at its opening in 2021, tourists from China, Japan and the United States mainly visited, but recently visitors are coming from more than 180 countries, including the United Arab Emirates and Kazakhstan."
The duty-free institutional sector also maintained a profit. Second-quarter operating profit was 6.2 billion won, swinging to a profit from a loss of 1.3 billion won a year earlier. It was the fourth straight profitable quarter since the third quarter of last year. On a first-half basis, it also turned to a profit of 9.6 billion won from a loss of 3.2 billion won. The effect of broadening handled categories to include cosmetics and liquor, in addition to existing luxury goods, fashion and accessories, was reflected after starting operations in the Incheon Airport DF2 zone in April.
However, results under consolidation retreated. Second-quarter consolidated net sales were 1.0681 trillion won, down 1.1%, and operating profit was 79.3 billion won, down 8.7%. U.S. mattress subsidiary ZINUS was a drag. ZINUS's second-quarter net sales plunged 35.7% to 147.5 billion won, and it posted an operating loss of 26.7 billion won. Reduced mattress orders from client companies due to weakened consumption in the United States were to blame.
A Hyundai Department Store official said, "Client order volumes are gradually normalizing, and orders for new original design manufacturing (ODM) contracts are increasing," adding, "In Korea as well, we plan to diversify distribution channels and expand customized products."