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(LEAD) Shinsegae swings to loss in Q2 on poor performance of duty-free division

All News 16:50 August 12, 2020

(ATTN: UPDATES with details, image; RECASTS headline)

SEOUL, Aug. 12 (Yonhap) -- South Korea's No. 2 retailer Shinsegae Inc. said Wednesday that it shifted to a net loss in the second quarter from a year earlier as its duty-free division was pounded by COVID-19 pandemic.

The net loss came to 106.3 billion won (US$89.6 million) in the April-June period, shifting from a net profit of 24.3 billion won a year ago, the retailer said in a regulatory filing.

Sales fell 33 percent to 1.01 trillion won, while it logged an operating loss of 43.1 billion won in the second quarter, swinging from an operating profit of 68 billion won a year ago.

The logo of Shinsegae Inc. (PHOTO NOT FOR SALE) (Yonhap)

Weak performances of its duty-free division triggered by the spread of the coronavirus hit its second-quarter results, Shinsegae said in a separate statement.

Sales of duty-free shops in Seoul and other cities dropped 31 percent in the second quarter from the previous year, while sales at travel retail shops in airports, including Incheon International Airport, nosedived 92 percent.

The results of department store division helped offset a slump in its duty-free business, Shinsegae said.

The department store division posted 354 billion won in sales in the second quarter, down 3.7 percent compared with a year ago, while its operating profit fell 56 percent to 14.3 billion won.

"Duty-free shops posted poor performances in the second quarter, but Shinsegae's earnings are expected to improve at a modest pace as upward trend in the department store may persist in the quarters to come," Lee Ji-young, an analyst at NH Investment Securities Co., said.

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