[비즈한국] Shinsegae Group's ‘2027 Regular Personnel Reshuffle’ is fast approaching. Expected as early as this week, this will be the second regular reshuffle since Chairman Chung Yong-jin took office, and observers are watching to see the direction of the ‘Chung Yong-jin-led system,’ which has declared a commitment to ‘responsible management.’
Shinsegae recently placed a massive $1 billion (approx. KRW 1.4 trillion) bet on the acquisition of Warner Bros. by Paramount in the U.S., signaling a bold move to bring a Korean version of a ‘Harry Potter theme park’ to life. As this reshuffle follows immediately after such a major event, analysts believe it will reveal who Chairman Chung trusts to execute his future vision.
Massive shake-up last year
According to the retail industry, Shinsegae Group is expected to announce its 2027 regular executive reshuffle as early as this week.
Last year, Shinsegae Group carried out a large-scale personnel overhaul, replacing heads of 8 affiliates under the banner of overcoming crises and restoring competitiveness. The group replaced heads of 5 companies in the E-mart division and 3 companies in the department store division, while promoting Park Joo-hyung, CEO of Shinsegae Department Store, and Moon Sung-wook, CEO of Signite, to the rank of president, thereby strengthening its performance-based personnel policy.
Chairman Chung Yong-jin’s involvement in management has also expanded. Since a marketing controversy involving Starbucks last June, Chairman Chung has taken on the role of CEO at both E-mart and Shinsegae Property, intending to take legal responsibility for management as a registered director of both companies. It is expected that during this reshuffle, E-mart will designate Chairman Chung as a co-CEO, with a final appointment to follow at next year's shareholders' meeting. The process is expected to reveal how Chairman Chung will divide roles with the existing management.
Who is Chung Yong-jin’s ‘trusted man’?
This regular reshuffle is expected to reveal who will be tasked with driving the interests of Chairman Chung, who has publicly declared his goal of becoming an ‘Asia-leading content hub.’
On the 6th, Shinsegae Group announced that Shinsegae Property would invest in the acquisition of Warner Bros. alongside David Ellison, co-CEO of Skydance, and U.S. investment firm RedBird. The $1 billion (approx. KRW 1.4 trillion) investment into the Hollywood content giant is intended to create an unprecedented theme park. The plan is to create new customer experiences by leveraging global content IP, such as Paramount’s ‘Mission: Impossible,’ ‘Star Trek,’ and ‘Top Gun,’ alongside Warner Bros.’ ‘Harry Potter’ and ‘Game of Thrones,’ which command global fanbases.
To this end, Shinsegae Hwaseong previously announced at the ‘Hwaseong International Theme Park Global IP Attraction Declaration Ceremony’ that it would be the first in Korea to build a theme park utilizing the Paramount brand. As a large-scale complex development project in Hwaseong Songsan Green City, it aims to integrate theme parks featuring global IP, Starfield, water parks, hotels, and golf courses. Shinsegae Group plans to combine customer data with content IP to expand beyond retail into a new form of cultural and experiential space.
Given the potential for expanding the business through co-production or partnerships for Korean original content, there is speculation that the reshuffle will include personnel who can effectively support the new businesses led by the Chairman.
Past investment failures also lead to ‘personnel’ accountability
Industry insiders emphasize that the history of Shinsegae Group’s past investment failures should also be noted. This is because there have been cases where those who led investment decisions that underperformed were ‘dismissed.’
In 2022, Shinsegae Group acquired Shafer Vineyards and its real estate through Starfield Properties for approximately KRW 300 billion. However, by the end of last year, the goodwill of Shafer Vineyards, valued at KRW 39.2 billion, was fully written off as an impairment loss on the books.
Businesses like Pierrot Shopping and PK Market also received poor scorecards, leading to their withdrawal. When major investments, such as the KRW 3.4 trillion acquisition of Gmarket, led to lackluster performance, Kang Hee-seok, the first external hire to head E-mart and SSG.com, had to step down at the end of 2019 after only four years.
In April 2024, when liquidity issues surfaced at Shinsegae Group, Chung Doo-young, CEO of Shinsegae Engineering & Construction, was suddenly dismissed. The head of the sales division and sales managers were also dismissed, with Shinsegae Group explaining this as ‘establishing a performance-based personnel evaluation system.’ However, critics in the industry argued that it is a structure where professional managers bear the burden of decisions driven by the owner family.
An industry official pointed out, “While professional managers who execute trillions of won in funds and handle the aftermath of the owner’s decisions are dismissed under the guise of ‘short-term underperformance,’ the strategic responsibility of the owner family, who actually set the stage for these investments, is never officially addressed in this ‘performance-based system.’”