[비즈한국] Following the 'Tank Day' controversy at Starbucks Korea, the first place the stock market turned its attention to was E-mart. E-mart is the largest shareholder of Starbucks Korea (SCK Company), holding a 67.5% stake. The remaining 32.5% is held by affiliates of GIC, Singapore's sovereign wealth fund. It is natural that concerns arose immediately that a prolonged boycott could impact E-mart's consolidated earnings. Chairman Chung Yong-jin's decision to issue a written apology on the 19th and a direct public apology on the 26th is seen as a move conscious of these concerns.
However, E-mart was not the only one shaken. Shinsegae, Shinsegae International, Gwangju Shinsegae, Shinsegae I&C, Shinsegae Food, and other group-related stocks saw a decline in succession. Gwangju Shinsegae was particularly notable. Since Starbucks Korea is an issue related to the E-mart division, why did the market sell off Gwangju Shinsegae as well?
The separation of Shinsegae Group's affiliates has effectively reached the final stages. The separation was formalized in October 2024 when Chairwoman Chung Yoo-kyung was promoted to Chairwoman of Shinsegae Inc., and in February of last year, Chairman Chung Yong-jin purchased a 10% stake in E-mart from his mother, General Chairwoman Lee Myung-hee, for approximately 225.1 billion won. In April, Chairwoman Chung Yoo-kyung received a 10.21% stake in Shinsegae from her mother as a gift. Currently, Chairman Chung Yong-jin's stake in E-mart is 28.56%, and Chairwoman Chung Yoo-kyung's stake in Shinsegae is 29.16%. The companies, the equity, and the final link of their mother have essentially been divided.
However, the stock price did not recognize this separation. The risks associated with Chairman Chung Yong-jin's side shook the stock prices of the Shinsegae-affiliated companies on Chairwoman Chung Yoo-kyung's side as well. While management control has been separated, reputations have not yet been. This is why Gwangju Shinsegae is important. Gwangju Shinsegae is carrying out the Gwangcheon Terminal complex project, a large-scale project worth approximately 3 trillion won, in phases from this year until 2033. It is a project that combines terminal modernization, department store expansion, and cultural, commercial, business, and lodging functions. Such a project cannot be achieved with money alone. Local government discussions, licensing, local public opinion, and discussions on public contributions must all move in tandem.
Moreover, Gwangju is a place where the two pillars of the Shinsegae Group clash in the same city. Along with Chairwoman Chung Yoo-kyung's Gwangcheon Terminal project, Shinsegae Property, a 100% subsidiary of E-mart led by Chairman Chung Yong-jin, is pushing for 'Grand Starfield Gwangju' in the Eodeungsan area. In other words, the two siblings are each carrying out their own massive projects while facing the same citizens, the same local government, and the same public opinion. This means the market may have been aware that the reputational risk originating from E-mart could agitate public opinion in the Gwangju region and spill over into Chairwoman Chung Yoo-kyung's projects.
Of course, one should be cautious about attributing the entire stock market decline to the Starbucks incident. Some of it may be profit-taking following a sharp rise due to expectations of domestic economic recovery. However, what matters is not the full extent of the decline, but the direction. The market viewed the Shinsegae Group's related stocks as a bundle again in light of this incident, revealing that even after the affiliate separation is 90% complete, reputational risk has not yet been separated.
While the U.S. headquarters' call option or potential GIC actions are variables, these are closer to extreme scenarios. A more realistic issue is whether the boycotting sentiment will spread beyond E-mart's performance to other businesses of the group and regional public opinion.
So, what should investors watch? First, Starbucks Korea's store traffic. Whether the boycott ends as an emotion or turns into sales data is the inflection point for E-mart's performance. Second, the progress of public opinion in Gwangju and the licensing progress of the Gwangcheon Terminal project. This will reveal whether the incident on Chairman Chung Yong-jin's side actually hinders Chairwoman Chung Yoo-kyung's business. Third, how differently the two affiliates act during the next crisis event.
The moment the market truly recognizes the Shinsegae Group's affiliate separation will not be when an apology is issued, but when the stock price of one side is not shaken by the bad news of the other. The shares are divided, but the reputations are not. For investors who can endure that time lag, it will be an opportunity; for those who cannot, it will be a loss.