SEOUL, Aug. 9 (Korea Bizwire) — E-Mart Inc., South Korea’s leading discount chain operator, swung to the red in the second quarter of the year for the first time in its history in the face of growing competition from online shopping rivals and e-commerce giants.
Net losses reached 26.6 billion won (US$24.7 million) in the April-June period on a consolidated basis compared with a net profit of 94.8 billion won a year ago, the company said in a regulatory filing.
E-Mart also posted an operating loss of 29.9 billion won in the second quarter, swinging from an operating income of 83.2 billion won a year earlier, though its sales inched up 14.8 percent on-year to 4.58 trillion won during the cited period.
This is the first time that E-Mart recorded an operating loss since it spun off from retail giant Shinsegae in 2011.
E-Mart attributed the losses to increased property taxes. E-Mart runs 142 large discount stores nationwide, and most of them use buildings owned by the company.
E-Mart added that a slump by some of its affiliates also dragged down the bottom line.
Its online shopping firm SSG.com posted an operating loss of 11.3 billion won in the second quarter, while convenience store operator E-Mart24 logged an operating loss of 6.4 billion won.
Local retail giants, albeit belatedly, are increasingly turning their eyes to the e-commerce business, with heavy spending on IT infrastructure and fast delivery, which already has been done by its archrivals, such as Coupang Inc. and other major e-commerce operators here.