South Korean retail giant Shinsegae Inc. enjoyed its best-ever quarterly sales for the July-September period as its luxury-focused operation survived the overall domestic consumption slump.

In a regulatory filing on Tuesday, Shinsega said its operating profit for the third quarter ended September came at 95.9 billion won ($82.2 million) on a consolidated basis, which was up 40.9 percent from the previous quarter and 36.6 percent from the same period last year. Sales also grew 6.4 percent on quarter and 17.3 percent on year to 1.6 trillion won, a record high for a quarter, while net profit more than doubled from the previous quarter and rose 37.0 percent from a year ago to 52.1 billion won.

On Wednesday, Shinsegae shares gained 2.12 percent to end at 265,000 won.

All its business fared well, with travel retail operation, in particular, delivering outstanding performance.

The duty-free division reversed to profit of 10.7 billion won from 3.2 billion won loss reported a year earlier. Its sales jumped 35.8 percent to 786.8 billion won from a year-ago period. According to a company official, the revenue from Myeongdong and Gangnam duty-free outlets in Seoul soared 30 percent and 93 percent, respectively, against a year ago.

Having all three major luxury brands – Louis Vuitton, Chanel and Hermes – in one place has succeeded in attracting more customers to Shinsegae duty-free shops, the company said.

Shinsegae International, which runs fashion and cosmetics business, registered an operating profit of 19.0 billion won, up 75 percent on year. Its sales increased 15.4 percent to 359.9 billion won. Central City division, operating hotel and express bus terminal, delivered 23.6 billion won in operating profit, up 64.0 percent on year, with sales gaining 23.9 percent to 70.6 billion won over the same period. Furniture and home décor unit Casamia recorded an operating loss of 5.2 billion won, widened from 1.0 billion won loss, due to an increase in expenses related to new store openings. Its sales rose 27.4 percent on year to 31.1 billion won.

Department store business, on a separate basis, reported its operating profit rose 12.2 percent on year to 66.0 billion won while sales contracted 10.9 percent to 470.1 billion won. The contraction in sales was mainly due to the closure of its Incheon outlet.

A company official noted that the third quarter is typically a slow season for retailers due to summer holidays that fall in the quarter but Shinsegae department division saw improvement in operating profit thanks to a surge in luxury goods sales. In the third quarter, its luxury goods sales increased 33 percent compared to a year earlier.

By Chung Seok-hwan and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]