Shinsegae Group Vice Chairman Chung Yong-jin has urged the South Korean retail giant to make drastic systems-centered reforms to ensure stable and sustainable growth.
"We need to change and innovate in a completely new way that is different from now," he told a management strategy meeting with group executives on Nov. 20, according to Shinsegae Inc.
"Change the organization, system and even work methods," Chung said, while presiding over the meeting of the Management Strategy Office, the group’s control tower.
Chung is the de-facto leader of the country’s largest retailer and a grandson of the late Samsung Group founder and Chairman Lee Byung-chul.
His call for the group-wide reform came after Shinsegae in September carried out one of its most drastic executive reshuffles as the country’s 10th-largest conglomerate was reeling from falling sales and weak share prices amid the economic slowdown.
In the first half of this year, E-Mart Inc., the group’s supermarket chain operator, swung to 39.3 billion won ($30 million) in operating losses on a consolidated basis from a year ago.
Under the September reshuffle, chief executives of both E-Mart and Shinsegae Department Store, were ousted. The two units are the group’s core pillars.
“It is time to seriously look back on our past and achievements ... The way we work must also change," Chung told its executives.
He urged the Management Strategy Office to play a role in creating a “predictable” management environment. The Management Strategy Office is in charge of the group’s final decision-making.
Last week, Shinsegae Group reorganized its strategy office, as well as the support and finance teams under the office.
In the first nine months of this year, the retail group reported a 15% drop to 433.8 billion won ($334 million) in operating profit from a year before, with sales down 17% to 4.6 trillion won over the same period.
Its share price has declined 21% to 173,700 won this year as of Thursday's close, against a 12% advance in the benchmark Kospi index during the period.
