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Retail

South Korea's E-Mart ends foray into discount stores

Retailer applies low-price strategy to reinvigorate mainstay hypermarkets

E-Mart will focus on luring customers back to its signature big-box stores, like this location in Seoul's Yongsan District. (Photo by Kotaro Hosokawa)

SEOUL -- South Korea's E-Mart will close a discount store chain inspired by Japan's chaotic Don Quijote shops as it focuses on shoring up a big-box retail business battered by e-commerce.

The Pierrot Shopping chain, which debuted in 2018, struggled to gain name recognition among consumers, and rising rents in urban centers weighed on its profits. E-Mart shut the store in Seoul's Myeongdong shopping district, and the remaining six locations will follow within the year.

South Korea's second-largest retailer behind the Lotte group has shifted focus toward luring customers back to its mainstay hypermarkets. These one-stop shops have seen their profits eroded by competition from online retail as well as more specialized bricks-and-mortar stores such as clothing sellers and pharmacies.

E-Mart operates about 160 general merchandise stores in South Korea. It will begin remodeling 50 locations in 2020 -- mainly near residential areas -- adding more space for food and expanding the selection of lower-priced items. The company also will expand its lineup of high-margin, private-brand products.

The retailer is taking a page from Japanese peers Aeon and Ito-Yokado, which moved to different models, particularly food-focused supermarkets and shopping malls with outside tenants.

Along with its hypermarkets, E-Mart operates a range of chains spanning convenience stores, drugstores and home electronics. The company logged revenue of 17 trillion won ($14.6 billion at current rates) in 2018.

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