SOUTH KOREA. Hotel Shilla, parent company of The Shilla Duty Free posted an -83.8% year-on-year slump in travel retail business operating profits to KRW7.0 billion (US$5.1 million) for the second quarter.
Q2 revenues rose +17.6% year-on-year to KRW832.9 billion (US$613.1 million).
Downtown duty-free revenue rose +15.4% year-on-year and airport sales grew by +19.5% (see chart below).
The results reflect the sluggish Korean duty-free market as retailers continue to adjust to government regulations curbing reseller activity as well as softening spend by Chinese tourists, according to a report by Chosun Biz.
Groupwide, Hotel Shilla’s operating profits slid by -58.9% year-on-year to KRW27.6 billion (US$20.3 million), while group revenue was up by +15.7% to KRW1,002.7 (US$738.4 million).
As reported, the Korea Duty Free Association reported a -4.4% month-on-month drop in nationwide sales (excluding inflight retail) in June to KRW1,199,565,739,843 (US$865.5 million).
Looking ahead, Hotel Shilla pledged to focus on profitability recovery to address the changes in the internal/external environment and travel retail market. ✈
