Shinsegae's shares have surged by 18% during trading, driven by expectations of consumer recovery linked to rising asset prices. The recent upward trend in the stock market has improved investor sentiment across the department store sector.
As of 2:37 PM on June 4, Shinsegae's stock was trading at 675,000 won, up 18.63% (106,000 won) from the previous trading day, according to the Korea Exchange.
Other department store stocks are also experiencing gains. Hyundai Department Store rose 15.02% to 140,100 won, while Lotte Shopping increased by 11.29% to 171,500 won.
Analysts attribute the recent stock market rally to a wealth effect that is positively impacting the performance of department stores. There is growing optimism regarding increased sales, particularly in the luxury goods sector.
Kim Myung-joo, a researcher at Korea Investment & Securities, stated, "The explosive rise in the stock market has led to favorable results for department store companies. The sales trends for the three major department stores in April and May are better than those in the first quarter."
He added, "Luxury sales are particularly strong, driven by the wealth effect from rising asset prices, including stocks, and the fear of missing out (FOMO) due to price increases in luxury jewelry. The continued strength of the yuan against the won is also expected to positively impact foreign sales."
* This article has been translated by AI.
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