SEOUL – South Korea’s E-Mart will close a discount store chain inspired by Japan’s chaotic Don Quijote stores as it focuses on strengthening a big-box retailing beaten by e-commerce.
The Pierrot Shopping chain, launched in 2018, is struggling to make itself known to consumers and the rise in rents in urban centers is weighing on its profits. E-Mart has closed the store in Seoul’s Myeongdong shopping district, and the other six stores will follow later this year.
South Korea’s second-largest retailer behind the Lotte group has focused on returning customers to its main hypermarkets. These one-stop shops have seen their profits eroded by competition from online retail as well as more specialty physical stores such as clothing vendors and drugstores.
E-Mart operates approximately 160 general merchandise stores in South Korea. It will begin remodeling 50 locations in 2020 – mostly near residential areas – adding more space for food and expanding the selection of low-cost items. The company will also expand its line of high-margin private label products.
The retailer is taking inspiration from its Japanese peers Aeon and Ito-Yokado, who have switched to different models, particularly food-focused supermarkets and malls with outside tenants.
In addition to its hypermarkets, E-Mart operates a range of chains covering convenience stores, pharmacies and home electronics. The company reported sales of 17 trillion won ($ 14.6 billion at current rates) in 2018.