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Background

GS Retail Company Limited is a Korea-based company founded in 1971.

It engages mainly in franchise chain convenience stores, including GS25 which accounted for 76% of 2017 revenue.

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GSR also engages in other businesses of supermarket, hotel, advertising, and health and beauty retail.

Business Description

GSR’s GS25 convenience stores (CVS) are the core revenue contributor at 76%. The company expanded its store count by 6% in 3Q18 YoY and now has about 13,000 stores across Korea.

The company also operates a larger store format, GS supermarket, which contributes 18% of its revenue and has more than 300 across Korea.

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In the hotel business GSR has brands of Parnas Hotel and InterContinental Hotel which contributed 3% of revenue. The remaining revenue comes from other businesses such as health and beauty retail, advertising, and transport agency.

GSR has been actively implementing various cost-control measures, restructuring programs, and integrated procurement for its supermarkets and CVS to improve margins. Under the integrated procurement, its supermarkets and CVS act as a single buyer for the same items to allow for lower prices and better terms.

Leadership

Yeon-soo Huh is the current President and CEO of GSR. He is also on the Board of Directors at GS Holdings and other companies within the group, including GS Netvision, GS Home Shopping, and Parnas Hotel. He received his Bachelor’s degree from Korea University and Master’s degree from Syracuse University, US.

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World Class Benchmarking

Profitable Growth has fallen from an already unimpressive rank of #6 in 2014 to be among the worst in the past 12 months.

Profitability rankings have followed the ones of Profitable Growth almost exactly with marginally better performance in the past 12 months. Growth has shown excellent results in 2015 and 2016 but has fallen drastically since.

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Asset utilization has consistently ranked at #4 while Profit Margin has shown to be below average in most years.

Sales growth has improved over the years but in the past 12 months, it had fallen to the same rank it had in 2014 at #5.Margin change has shown poor performance since 2017.