Shares of E-Mart Inc., a discount store unit of South Korea’s retail conglomerate Shinsegae Group, are riding high in Seoul trading, driven by stellar performance of its warehouse store business E-Mart Traders that is expected to see its sales jump 26 percent on year to 1.4 trillion won ($1.2 billion) next year.

E-Mart shares have gained 27 percent to close at 193,000 won on Thursday from a new 52-week low of 152,000 won recorded on September 19. The recent rally in E-Mart stock is largely attributed to the retailer’s warehouse store business Traders.

Market analysts forecast that Traders would post 32 billion won in operating profit on sales of 1.1 trillion won this year, and 40 billion won in operating income on sales of 1.4 trillion won next year. But growth of E-Mart’s namesake hypermarket unit of the retailer is expected to slow down, with its sales likely growing from 11.0 trillion won last year to 11.3 trillion won this year.

This suggests that Traders’ contribution to E-Mart’s overall operating income will account for about 30 percent of E-Mart discount store unit’s operating profit growth that is expected to gain by up to 30 billion won next year.

The firm in September opened its 11th E-Mart Traders outlet in Hanam, western outskirt of Seoul, and it plans to open three additional Traders outlets next year in line with its goal to increase the total number of its warehouse store outlets to 40 or above within five years.

Market experts expect that the addition of new stores would help Traders rapidly grow as there are no other strong contenders in the country’s warehouse store industry except for Costco Wholesale Korea, a local subsidiary of U.S. retail giant Costco Wholesale Corp.

E-Mart shares closed Friday at 194,000 won, up 0.52 percent or 1,000 won from the previous session.

By Hong Jang-won

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