Shinsegae's chairman boosted Emart's stock — but the company's troubles aren't over
Published: 13 Jan. 2025, 19:08
Updated: 13 Jan. 2025, 19:42
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- CHO YONG-JUN
- [email protected]
![Emart supermarket store in Seoul [NEWS1]](https://koreajoongangdaily.joins.com/data/photo/2025/01/13/75c8738e-39b5-413c-a5b2-8aaaa8316457.jpg)
Emart supermarket store in Seoul [NEWS1]
[NEWS IN FOCUS]
Shinsegae Group Chairman Chung Yong-jin chose an unconventional way of inheriting his mother's stake in the family business: buying it with his personal funds. In doing so, the executive boosted a stock that has long struggled to gain traction.
Experts say the purchase could be a boon for the company's share price in the short run but warned investors to exercise caution: The supermarket chain, to permanently reverse its string of bad fortune, will need to find viable ways of outcompeting e-commerce players like Coupang and AliExpress.
Chaebol founding families commonly pass shares to their next-in-line heirs. Chung received 1.47 million shares from his father, Chung Jae-un, in 2007.

But Chung, instead, will spend around 214.8 billion won ($146.5 million) of his own funds to purchase the 2,787,582 shares of Shinsegae Group affiliate Emart that are owned by his mother, Shinsegae Group Chair Lee Myung-hee. Chung will pay 76,800 won per share, 18.52 percent more than Friday’s closing price. The measure will cost Chung around 150 billion won more than inheriting her shares as a gift would, though Lee will be on the hook for 40 billion won in capital gains tax.
Emart described the unusual measure as “Chung’s measure to strengthen his [philosophy of] responsible management that is based around meritocracy,” in a statement released Friday, adding that Chung is showing his sense of responsibility and confidence in raising Emart’s corporate value by using his personal funds to purchase Emart shares.”
Emart's closing price stood at 75,000 won at the beginning of 2024, but the stock has rarely broken the 60,000 won mark in the past year. The retailer, after reporting operating profit of 316.8 billion won in 2021, recorded just 135.7 billion won in 2022 and posted a loss of 46.9 billion won in 2023, a first since establishing its corporate body in 2011. The result of the decline is complex, from losses stemming from construction affiliate Shinsegae E&C to the steep competition online player Coupang poses to brick-and-mortar affiliate Emart and bleeding e-commerce subsidiary Gmarket, which Emart purchased for 3.4 trillion won in 2021.
The stock purchase “may be positive for the short-term investment sentiment,” a report from Daishin Securities released Monday said. And it was. Emart rose 2.16 percent on Monday to close at 66,200 won ($45), the first trading day after the announcement, which was made after market close on Friday.
Daishin Securities estimated that the retailer would report operating profit of 152 billion won in 2024 thanks to decreased losses at Shinsegae E&C, the increase in drink prices by SCK Company, which operates Starbucks in the country and the improvement in Traders Wholesale Club.
The firm expects growth at existing offline stores, however, to be low.
“A more meaningful increase in share price would require recovering competitiveness in its core business,” the report said.
Investors are cautiously watching to see if the stronger control by Shinsegae's scion could provide more sustained momentum.
BY CHO YONG-JUN [[email protected]]
with the Korea JoongAng Daily
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