SOUTH KOREA. Shinsegae Duty Free posted a KW23 billlion (US$20.3 million) operating profit for the first quarter, a stark contrast to the KW32 billion (US28.3 million) loss in the equivalent period last year. Duty free sales fell -2% year-on-year to KW479 billion (US$423.5 million).
The department store to travel retail giant said that sharp rent cuts at Incheon International Airport had helped profitability while strong ‘B2B’ business (daigou trade) had spurred sales.
Q1 downtown duty free sales increased +35% year-on-year over a deeply troubled period in 2020 while airport sales slumped -92% as travel into and out of the country remains heavily restricted.
The results build on progress made in Q4 2020 when operating performance turned into a small KRW3 billion (US$2.7 billion) profit due to a KRW90 billion (US$81.4 million) cut in airport rents and an additional KRW12 billion (US$10.8 billion) in cost controls. For the full 2020 year, the duty free division posted heavy losses of KRW87 billion (US$78.6 million).
As reported, Shinsegae Duty Free is set to close its downtown store in Gangnam, Seoul in July, a victim of the collapse in inbound and outbound tourism driven by the COVID-19 pandemic that continues to rage in the Republic. The country reported 715 new cases today, including 692 local infections, the highest figure since 28 April.
Overall the group turned in a stellar Q1 showing with operating income soaring by +3,659% from just KW3 billion (US$2.7 million) last year to KW124 billion (US$109.6 million), helped by relaxed social distancing measures and a low comparative base.
Gross sales rose +17.9% to KW2,175 billion (US$1.9 billion).