Homeplus alliance lifts Hyundai DS
Shares in Hyundai Department Store, Korea’s second-largest, rose for a second consecutive day yesterday, on news it will partner with Homeplus, Korea’s No. 2 discount store chain.Hyundai’s stock price rose 2,100 won ($1.50), or 3.4 percent, to 63,100 won. This follows gains of 4.5 percent on Monday after an announcement that Hyundai and Homeplus agreed that the discount chain will operate stores in the Hyundai’s planned shopping complexes.
Analysts say both companies offer something the other needs. Hyundai and Homeplus exclusively run department stores and discount stores, respectively, compared with rivals Lotte and Shinsegae, which run both department and discount stores under their company umbrellas.
HMC Investment and Securities raised Hyundai Department Store’s target price from 61,000 won to 85,000 won.
“It is a customized win-win strategy for Hyundai Department Store and Homeplus,” said Park Jong-ryeol, an analyst at HMC Investment and Securities.
Park said the strategy saves Hyundai the cost of breaking into the saturated discount store sector. For Homeplus, it offers the lure of additional customers, he said.
Hyundai plans to build five shopping complexes similar to malls by 2011. Homeplus is not a listed company.
By Moon Gwang-lip Staff Reporter [joe@joongang.co.kr]
with the Korea JoongAng Daily
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