Shinsegae Group is under pressure after Starbucks Korea marketing campaign triggered backlash over politically sensitive wording.

Starbucks Korea later pulled the promotion and apologized.

Market analysis firm IGAWorks said weekly sales fell 26% and app downloads dropped 23.6% from the previous week.

The backlash matters for Emart, Shinsegae’s retail unit, which raised its stake in Starbucks Korea to 67.5% in 2021 to gain management control.

Under the licensing agreement, Starbucks Coffee International can buy back the shares under certain conditions, including at a 35% discount if the agreement is terminated due to Emart’s liability.

Starbucks Korea remains an important asset for Emart, recording 3.2 trillion won (US$2.17 billion) in sales last year and paying about 71.7 billion won (US$48 million) in dividends to Emart, which made up most of the retailer’s dividend income from affiliates.

Starbucks Korea also introduced broader refund measures following the backlash.

🔗 Source: The Korea Times

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