On April 30, 2025, Shinsegae Group announced a significant shift in its ownership structure as Lee Myung-hee, the group chairman, donated 10.21% of her shares to her daughter, Chung Yoo-kyung, the president of Shinsegae. This donation, set to take effect on May 30, 2025, will increase Chung's stake in Shinsegae from 18.95% to 29.16%, effectively completing a long-anticipated succession plan.
Shinsegae's official statement highlighted that the decision to donate shares was made to strengthen independent management and responsible governance across different sectors of the business. This move is seen as a pivotal moment in the group’s transition towards a more structured management approach.
The donation marks the culmination of a succession process that has been in the works for over two decades. Lee Myung-hee has been strategically transferring shares to her children, Chung Yoo-kyung and her son, Chung Yong-jin, who has been managing E-Mart. In February 2025, Chung Yong-jin purchased 10% of E-Mart shares from his mother, further facilitating the separation of the two major affiliates within the Shinsegae Group.
Industry analysts believe this latest donation will accelerate the ongoing process of affiliate separation between E-Mart and Shinsegae Department Store. Since Lee Myung-hee first separated Shinsegae from the Samsung Group back in 1991, she has worked systematically to delineate the management of the group’s various sectors. The siblings have gradually been assigned distinct areas of responsibility, with Chung Yong-jin overseeing E-Mart and Chung Yoo-kyung focusing on department stores and related businesses.
The share transfer is not merely a financial maneuver; it encapsulates a broader strategy aimed at ensuring that both siblings can operate their respective businesses independently while still under the umbrella of the Shinsegae Group. "This donation was decided to strengthen independent management and responsible management for each sector," Shinsegae stated, underscoring the intent behind the transfer.
As the management succession unfolds, the company is also preparing to address the remaining affiliates that require reorganization to complete the separation. Notably, SSG.com and Shinsegae Engineering & Construction are among the entities that will need to be restructured to finalize the affiliate separation.
Chung Yoo-kyung's new stake in Shinsegae is valued at approximately 155.6 billion won based on the closing share price of 158,100 won on the day of the announcement. This substantial transfer of wealth not only solidifies her position within the company but also reflects the ongoing evolution of the family-run business.
Since 2011, when Lee Myung-hee first began splitting the management of E-Mart and the department store, the groundwork for this moment has been laid. The official announcement of the separation was made in October 2024, coinciding with regular executive appointments within the company.
The completion of this share donation signifies a significant transition for the Shinsegae Group, as it moves towards a more defined structure with clearly delineated leadership roles. With the management and ownership structure now largely separated, the company is poised for a new chapter under the leadership of its next generation.
As the business landscape continues to evolve, the Shinsegae Group's approach to management succession could serve as a model for other family-owned enterprises facing similar transitions. The ability to maintain operational independence while fostering family involvement is a delicate balance that many companies strive to achieve.
Looking ahead, the Shinsegae Group is expected to undergo further changes as it continues to adapt to market demands and enhance its competitive edge. The successful completion of this succession plan could lead to new opportunities for innovation and growth within the organization.
In summary, Lee Myung-hee's donation of her shares to Chung Yoo-kyung represents not only the completion of a personal legacy but also a strategic maneuver aimed at ensuring the long-term viability and independence of the Shinsegae Group. As the siblings take on their respective roles, the company is set to navigate the future with a renewed focus on independent management and sector-specific strategies.
