South Korea’s retail giant Shinsegae Group on Wednesday carried out one of its most drastic executive reshuffles, officially splitting the group’s two business pillars – E-Mart Inc. and Shinsegae Department Store – into two different subgroups.
The business division is seen as Shinsegae Group’s move to consolidate leadership transition to third-generation leaders at Korea’s 11th-largest conglomerate.
Under the leadership change, Chung Yoo-kyung, president of Shinsegae Inc., the operator of Shinsegae Department Store, has been promoted to Shinsegae Inc.’s chairwoman.
She has led Shinsegae Inc. since she became Shinsegae Inc.’s president in December 2015.
Shinsegae Group chairman Chung Yong-jin (left) and Sinsegae Inc. Chairwoman Chung Yoo-kyung (Courtesy of Yonhap)
Industry officials said her promotion is rare as she skipped the vice chairmanship to directly ascend to the highest leadership position, signifying that she’s first in line to assume the group’s management control.
In Korea’s corporate landscape, where succession typically favors the eldest son, Jung’s ascension to the top post is “surprising,” they said.
With the leadership change, Chung Yong-jin, chairman of Shinsegae Group, will oversee E-Mart Inc., Korea’s largest hypermarket chain.
Chung Yong-jin is the eldest son of Lee Myung-hee, who has the title of Shinsegage Group’s general chairwoman. Chung Yoo-kyung is the daughter of Lee.
Shinsegae Groupk’s General Chairwoman Lee Myung-hee
“The complete business separation of Shinsegae Department Store and E-Mart and Chung Yoo-kyung’s promotion are aimed at strengthening the foundation for responsible management, setting the stage for further growth,” Shinsegae Group said in a statement.
Even under the current structure, Chung Yong-jin has managed the retail, food and hotel businesses at Shinsegae, while his sister Chung Yoo-kyung has taken charge of the department store, duty-free and fashion businesses.
CHUNG YOO-KYUNG’S BUSINESS ACUMEN
Analysts said Chung Yoo-kyung’s promotion recognizes her successful management of Shinsegae’s department store sector.
Under her leadership, the department store’s flagship store in Gangnam, an upscale district in southern Seoul, posted 3 trillion won in sales last year – a record high for a single branch.
Shinsegae Department Store’s Gangnam branch
Shinsegae Department Store’s other branches, including those in Busan, Daegu and Gwangju, have also become leading stores in their respective regions.
Having joined Shinsegae Group’s business management as an executive at Josun Hotels & Resorts Co. in 1996, she became a vice president at Shinsegae Inc. in 2009.
The 52-year-old is the first woman born in the 1970s to hold a chair position among Korea’s top 200 companies.
MAJOR AFFILIATES
Since its spin-off from Samsung Group in 1997, Shinsegae Group has steadily grown, with its groupwide sales reaching over 71 trillion won ($51.4 billion) in 2023.
E-Mart’s major subsidiaries include e-commerce unit SSG.COM; Gmarket Inc.; SKC Ltd., which owns Starbucks Korea; E-Mart24 Inc.; Shinsegae Property, which operates shopping mall chain Starfield; Shinsegae Food; and Josun Hotels & Resorts.
E-Mart is the supermarket brand of Shinsegae Group
Sinsegae Inc. operates the department store business and has affiliates such as Shinsegae DF Inc., which operates the duty-free business; Shinsegae International, a fashion and beauty business; Shinsegae Central City, the group’s property development unit; Shinsegae Casa, an apparel maker; and Shinsegae Live Shopping.
Chung Yong-jin, Shinsegae Group chairman, is the grandson of late Samsung Group founder Lee Byung-chul, and a cousin of Samsung Electronics Co. Chairman Jay Y. Lee.
Chung Yong-jin and her sister Chung Yoo-kyung have 18.56% of E-Mart, respectively. They also own 18.56% of Shinsegae Inc., respectively.
Their mother Lee, the youngest daughter of the late Lee Byung-chul and younger sister of Samsung Electronics’s late Chairman Lee Kun-hee, has a 10% stake each in E-Mart and Shinsegae.
SHARES OF SHISEGAE UNITS RISE
On Wednesday, Shinsegae Group also conducted a leadership reshuffle, the first since Chung Yong-jin assumed the top job in March.
Starfield shopping mall in Korea built by Shinsegae E&C
Han Chae-yang, vice president of E-Mark, became the president of the company.
Song Man-joon was appointed CEO of E-Mart24, while Kang Seung-hyup was named CEO of Shinsegae Food.
Kim Hong-geuk, CEO of Shinsegae Casa, will now double as the head of Shinsegae International’s Beauty & Lifestyle division.
Jeon Sang-jin was named CEO of Josun Hotels & Resorts, and Ma Ki-hwan has been hired from outside Shinsegae to lead Shinsegae L&B Co.
Kim Jae-seop, an executive of E-Mart, has been named CEO of Shinsegae’s baseball team SSG Landers.
The stock market reacted positively to the news of Shisegae’s executive reshuffle and the business division.
Shares of Shinsegae Inc. closed up 1.5% at 151,400 won while E-Mart finished 2.2% higher at 64,900 won. The broader benchmark Kospi index ended down 0.9%.
By Jae-Kwang Ahn and Hun-Hyoung Ha
ahnjk@hankyung.com
In-Soo Nam edited this article
