Shinsegae International Co., a merchandising unit of South Korea’s retail giant Shinsegae Group, has seen first surplus in its cosmetics division in five years thanks to a rise in sales of its makeup brand VIDI VICI at duty-free shops.

According to its regulatory filing, Shinsegae International’s cosmetics business earned 5.7 billion won ($5.3 million) in operating income last year on sales of 62.7 billion won, reversing to profit for the first time since 2012 when it took over VIDI VICI to make a foray into the cosmetics industry. VIDI VICI also swung to profit of 570 million won last year for the first time on sales of 22.9 billion won, up 126 percent from a year ago.

An unnamed official from Shinsegae International said the strong growth in cosmetics sales at local duty-free stores attributed to the surplus. Its beauty products sales at duty-free shops by value surged from 2.8 billion won in 2016 to 15.4 billion won last year.

Shares of Shinsegae International ended at 83,700 won on Monday, down 1.06 percent or 900 won from the previous session.

Since advancing into the cosmetics market, Shinsegae International has been putting out efforts to lure Chinese consumers, in particular, with highly-sought mask pack and foam cleansing products. Its efforts paid off last year as more than a daily average of 2,000 VIDI VICI’s best-selling Skin Illumination and Hydra Overnight Mask products were sold at local duty-free shops.

Shinsegae International has also been expanding its fragrance import business after acquiring domestic sales rights of popular brands Byredo in 2014, Santa Maria Novella in 2015 and Diptyque in 2017.

The Shinsegae International official said fashion currently accounts for the lion’s share of its overall sales but the company will strive to groom its cosmetics business as another core business that can raise about 200 billion won or more in sales by 2020.

By Kang Da-young and Lee Eun-joo

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