[Edaily Reporter Han Jeon-jin ] Ahead of Shinsegae Co.,Ltd’s regular executive reshuffle, attention is focused on the composition of the management team that will support Chairman Jeong Yong-jin’s “responsible management.” This is because, while Chairman Jeong is set to return as CEO of E-MART Co., Ltd.(139480), the position of Head of the Group’s Management Strategy Office has remained vacant for five months. Given that the group carried out a large-scale reshuffle of CEOs at major affiliates last year and has also conducted ad hoc personnel changes this year, the scale of the changes—along with the division of roles among Chairman Jeong, professional managers, and the group’s control tower—is expected to be a key point of interest in this round of personnel changes.

According to industry sources on the 30th, Shinsegae Co.,Ltd is preparing for its 2027 regular executive reshuffle. Recent announcement dates—September 20, 2023; October 30, 2024; and September 26 of last year—have generally been concentrated in September and October. This year’s reshuffle will be the first regular reshuffle since Chairman Jeong announced in June that he would assume the roles of CEO of E-MART Co., Ltd. and Shinsegae Co.,Ltd. to strengthen responsible management. However, the company maintains that no decisions have been finalized regarding the timing or details of the reshuffle.

The position drawing the most attention is that of Head of the Business Strategy Office, the group’s control tower. Shinsegae Co.,Ltd signaled an upcoming reorganization of the entire Business Strategy Office in late April when it relieved Lim Young-rok—then Head of the Business Strategy Office and CEO of Shinsegae Property—of his dual roles. Since then, the division has been operated under the leadership of Chairman Jeong without appointing a successor. President Lim stepped down as CEO of Shinsegae Co.,Ltd. last June, and the company subsequently shifted to a co-CEO system led by Chairman Jeong and CEO Lee Hyung-cheon. This effectively consolidated the responsibilities for group-wide strategy and key development projects—previously handled by President Lim—under Chairman Jeong. Attention is now focused on whether a new head will be appointed in this round of personnel changes or if Chairman Jeong will continue to oversee these areas directly.

Chairman Jeong’s return as CEO of E-MART Co., Ltd. is intertwined with these personnel changes. According to a plan announced last June, E-MART Co., Ltd. intends to nominate Chairman Jeong as a co-CEO during this regular personnel reshuffle and finalize his appointment following next year’s shareholders’ meeting. This means Chairman Jeong will also assume direct responsibility for management performance as CEO of E-MART Co., Ltd. At Shinsegae Co.,Ltd., CEO Lee Hyung-cheon handles day-to-day operations and organizational management, while Chairman Jeong is responsible for the mid- to long-term vision and enhancing corporate value. At E-MART Co., Ltd., too, attention is focused on how authority and responsibility will be divided between the professional manager and Chairman Jeong.

Consequently, attention is also focused on the future and role of E-MART Co., Ltd. CEO Han Chae-yang. Since being appointed CEO of E-MART Co., Ltd. in 2023, CEO Han has led efforts to restore competitiveness in the company’s core business. In the first half of this year, E-MART Co., Ltd.’s standalone operating profit reached 171.9 billion won, a 15.4% increase year-over-year; however, consolidated operating profit—including subsidiaries—fell 25.2% to 135.3 billion won. Consequently, it has become crucial to determine how to leverage the expertise of the existing management team and allocate responsibility for managing affiliates following Chairman Jeong’s appointment.

The fact that the company had already replaced the heads of major affiliates last year suggests a preference for stability over large-scale reshuffles. During last year’s regular personnel reshuffle, Shinsegae Co., Ltd. replaced the CEOs of five companies in the E-MART Co., Ltd. division—including SSG.com and SHINSEGAE FOOD—and three in the department store division—including SHINSEGAE INTERNATIONAL(031430)and Shinsegae DF. This year, the company also changed the leadership structure at Shinsegae Property and appointed CEO Shin Dong-woo to Starbucks Korea. Since a significant number of the new CEOs have been in office for about a year and key positions have been adjusted through ad hoc personnel changes, there is speculation that the existing management team will be given time to deliver results from the business restructuring.

However, underperforming affiliates within the E-MART Co., Ltd. division remain a challenge. SSG.com, which replaced its CEO last year, recorded an operating loss of 51.4 billion won in the first half of this year, widening its deficit, while SHINSEGAE FOOD also saw its operating profit drop by 54.2% during the same period. SSG CO., LTD. is also set to undergo a business restructuring this December, splitting into a continuing entity focused on grocery shopping and a newly established entity, Shinsegae Co.,Ltd., focused on fashion and beauty. It remains to be seen whether the composition of the management teams and organizational restructuring for the two entities ahead of the split will be reflected in this round of personnel appointments.

In the department store division led by Chairwoman Jung Yoo-kyung, attention is focused on whether the existing management team will be reappointed amid improving performance. Shinsegae Co.,Ltd. posted its best-ever first-half results, with consolidated operating profit reaching 365 billion won in the first half of this year—a 75.7% increase from the same period last year. SHINSEGAE INTERNATIONAL and Shinsegae DF, which underwent management changes last year, also returned to profitability. While the E-MART Co.,Ltd. division faces changes in its management structure following Chairman Jeong’s appointment, the key point of interest for the department store division is whether it will further solidify its current structure based on its improved performance.

A business insider stated, “Since Chairman Jeong Yong-jin is taking on the role of CEO at affiliate companies as well, it has become crucial to define the scope of decision-making and responsibility for both the Strategy Office and professional managers.” The insider added, “Maintaining profitability in core businesses and expanding investments in new ventures, such as AI (artificial intelligence) data centers, require different decision-making criteria. The direction of this personnel reshuffle will be revealed by who is entrusted with these tasks and how they will be coordinated.”