A past advertisement for Himart, once the dominant electronics specialty retailer in South Korea
A past advertisement for Himart, once the dominant electronics specialty retailer in South Korea

First-half operating losses topping 10 billion won?

There was a time when newlyweds furnishing their first home would not dream of skipping a visit to Himart. The chain's catchy slogan — "Let's go to Himart!" — became a cultural catchphrase, earning it the nickname "the nation's electronics store." Now, Lotte Himart has posted more than 10 billion won ($7.35 million) in losses in the first half of this year alone, battered by competition from online shopping platforms.

The dismal earnings have sent the share price into freefall. Lotte Himart shares once soared past 100,000 won. By Wednesday they had fallen to 5,950 won, breaching what many had considered a last line of support at 6,000 won. The company's price-to-book ratio has dropped to 0.2 times, one of the lowest among all listed companies in South Korea.

Retail investors have borne the brunt of the collapse. "I held for the long term and I'm completely wiped out," one investor wrote online. "I thought it couldn't get this bad," wrote another.

Lotte Himart recorded an operating loss of 14.8 billion won in the first quarter of this year. In the second quarter, operating profit on a consolidated basis came in at 900 million won, down 91 percent from the same period a year earlier. Sales have declined for two consecutive years. Revenue that once exceeded 4 trillion won has been cut roughly in half, to the 2 trillion won range.

Hammered by a slump in the home-appliance market, Lotte Himart has been expanding its lineup of mobile products — including IT devices and smartphones — in a bid to reverse its fortunes, but the effort has so far fallen short.

Lotte Himart's Jamsil branch [Photo, Lotte Himart]
Lotte Himart's Jamsil branch [Photo, Lotte Himart]

Himart was once spoken of as the undisputed king of electronics retail. Lotte Group acquired the chain from Eugene in 2012 for 1.25 trillion won ($915 million). At the time, Himart commanded well over 40 percent of the market — a dominant, unchallenged leader.

That era is now a distant memory. Himart's growth began to stall in 2022, just as the online market was surging. Today's consumers increasingly prefer to buy home appliances and IT products online rather than in physical stores, drawn by lower prices.

Competition in the offline space has also intensified, as Samsung Electronics and LG Electronics — the two giants of the IT and electronics industry — have expanded their own branded stores, sharply reducing their reliance on Himart as a sales channel.

Coupang Inc has piled on as well. E-commerce players led by Coupang have been aggressively undercutting rivals on price, steadily capturing more market share. The chain that was once a retail powerhouse now finds itself fighting for survival.


park@heraldcorp.com