Shares of South Korea’s leading retailers are heading south as sluggish sales from protracted slump in consumption on top of heavier antitrust regulation on big retailers from the new administration cloud their business outlook.

According to the Korea Exchange on Monday, shares of Hyundai Department Store Co. retreated 14.3 percent alone in August. The stock that hovered above 110,000 won ($96.92) during the last week of July finished Monday at 94,000 won.

Stocks of Shinsegae Inc. and E-mart Inc. lost 18.9 percent and 12.3 percent, respectively.

As of 1:13 p.m. Tuesday, shares of Hyundai Department were at 95,100 won, Shinsegae at 194,500 won, and E-mart at 225,000 won.

Lotte Shopping Co. shares fell 2.7 percent despite a 9.2 percent jump on Aug 17, which came after the firm’s announcement of increase in dividend payment and amid expectations for its demerger into a holding entity. At 1:13 p.m. Tuesday, its stock was at 261,500 won.

Investors are shedding retailers because of poor sales. Sales of large department stores have been hurt by absence of Chinese shoppers amid diplomatic row between Seoul and Beijing over the deployment of U.S. Terminal High Altitude Area Defense (THAAD) anti-missile system.

Lotte Department Store’s sales growth retreated by 5.2 percent on year in the second quarter and resulted in a whopping 48.9 percent on-year fall in operating profit.

According to regulatory filings, growth in Lotte Shopping’s overseas business contracted by 38.5 percent compared to the previous year due to China’s retaliatory actions over THAAD. Hyundai Department Store whose revenue is generated mostly from its department store division saw its overall operating profit largely hurt from a 1.7 percent fall in department store sales.

Making matters worse, the Fair Trade Commission warned of clampdown on unfair practices by big retailers. One of the measures it is mulling is scaling down business days of large shopping malls and outlet stores.

“Some of the departments stores are categorized as comprehensive shopping malls and reduction in their business days could hurt their profit by more than 10 percent a year,” said Nam Ok-jin, an analyst at Samsung Securities Co.

By Lee Yong-gun

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