SSG.com, the e-commerce affiliate of Shinsegae Group, will launch its fashion, beauty, and lifestyle business as a separate corporation.
SSG.com said on the 27th that it held a board meeting and approved a spin-off of its lifestyle division. Once the partitioning is complete, the surviving entity will remain as SSG.com Co., Ltd., and the new entity will be Shinsegae Mall Co., Ltd. (tentative name). The company plans to approve the spin-off plan at an extraordinary shareholders meeting in late Oct. and complete related procedures with Dec. 1 as the effective date.
Even after the partitioning, the business scope of the surviving entity SSG.com will not change. It will maintain a comprehensive mall format that centers on online grocery shopping while continuing to handle fashion and beauty products. The company said this is not a structure that separates grocery into SSG.com and lifestyle into Shinsegae Mall; rather, it will carve out Shinsegae Mall, which had been within a single corporation, into a separate entity and grow it into a lifestyle-focused specialist.
The new entity Shinsegae Mall aims to upgrade into a premium e-commerce platform led by fashion, beauty, and lifestyle. After the partitioning, the two companies will link their platforms so that Shinsegae Mall products can be viewed on the SSG.com app, and Shinsegae Mall plans to strengthen its own platform while expanding customer touchpoints through external channels.
SSG.com's roots go back to 2014. At the time, Shinsegae Group introduced SSG.com, an integrated platform that combined E-MART Mall and Shinsegae Mall into one. The aim was to enable buying and selling in one place of fresh foods where E-MART had strengths and premium goods found at department stores. In 2019, saying it needed to respond more effectively to the online market, it carved out the two companies' online businesses and established an integrated corporation.
Because it is a spin-off, the equity structure of the new entity mirrors that of the surviving entity. Shinsegae Mall will also launch with E-MART(139480) holding 65% and Shinsegae(004170) holding about 35%. Earlier, E-MART and Shinsegae bought the entire 30% SSG.com equity held by the financial investor (FI) Olympus Jeil-cha for 1.2711 trillion won, and as this transaction was completed on the 26th of this month, their stakes were set at 65.1% and 34.9%, respectively. The business structure overhaul plan came just a day after clearing out the external investor stake.
Some interpret the partitioning as a preliminary step for a split of affiliates between E-MART and Shinsegae Department Store. The affiliates jointly owned by E-MART and Shinsegae are essentially SSG.com and Shinsegae Uijeongbu Station, and tidying up the SSG.com equity had been considered the final task for a split. If the corporations are split in line with the business profiles—grocery for E-MART and fashion and beauty for the department store—it will become much easier thereafter to sort out ownership through methods such as swapping equity between the two companies.
SSG.com said, "By conducting a spin-off, we will enhance the expertise of each business and be able to respond more quickly to market changes based on an independent decision-making structure," adding, "Even after the partitioning, we will maintain customer touchpoints and business linkages."