KOSPIRetail & Consumer006370

Daegu Department Store

₩3,010▼ 1.31%2026-10-02 close

Market Cap

₩32.4B

Turnover

₩200M

Volume

50K

Shares out.

10.8M

PER

—

PBR

0.3×

EPS

-₩3,779

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

Third Buyout Collapse Deepens Financial Strain

After the buyer was replaced mid-process, Daegu Department Store's control-sale contract collapsed again in August 2026 due to a missed installment payment, sending the company's liquidity and restructuring agenda back to square one.

1
The July 2026 control-stake (25.82%) sale contract was terminated on August 25 after the replacement buyer, Leango Partners, also failed to pay the second installment.
2
The flagship store has remained closed for nearly five years since July 2021, leaving Daebaek Plaza as the only store currently in normal operation.
3
Annual revenue fell for four straight years from KRW 75.9 billion in 2022 to KRW 53.1 billion in 2025, while operating losses stayed near KRW 15 billion each year.
4
The debt ratio jumped from 103.2% in 2022 to 206.9% in 2025, with operating cash flow negative in every one of the four years.
5
The current share price trades well below the company's own calculated book value per share, with the price-to-book ratio sitting far under 1x.

Business structure

Daegu Department Store traces its roots to Daegu Sanghoe, founded in 1944, and became the center of Daegu's commercial district after opening its flagship store on Dongseong-ro in Jung-gu in 1969. It listed on the KOSPI in 1988 and opened Daebaek Plaza in 1993.

Its core business consists of department store operations and tenant leasing (department store corner rentals).

However, the entry of major nationwide department store chains into the region combined with the COVID-19 shock, and the flagship store went into indefinite closure starting July 1, 2021; it has not reopened since, leaving Daebaek Plaza as the only store currently operating normally.

The company holds four real estate assets: the former flagship store on Dongseong-ro, Daebaek Plaza in Daebong-dong, the former Daebaek Outlet in Sincheon-dong (now Hyundai City Outlet Daegu), and a logistics center in Sinseo-dong, with the former outlet and logistics center leased out to Hyundai Department Store Group and an external logistics operator, respectively.

As a result, the company's business model has shifted to depend more heavily on rental income and real estate asset value than on direct retail operations.

The Daegu department store market is contested by large stores affiliated with Lotte, Shinsegae, and Hyundai Department Store Group, and the relative influence of locally rooted Daegu Department Store has continued to shrink.

Against this backdrop, the company has repeatedly pursued sales of control and real estate since 2023, but a 2022 deal to sell the flagship store to JHB Holdings and 2023 control-sale talks with Cha Bio Group both fell through, and in 2026 a contract to sell a 25.82% stake to Segyeong Invest and Aram Korea (at KRW 8,000 per share, totaling about KRW 22.37 billion) was also terminated after the buyer was replaced by Leango Partners and still failed to pay the installment.

Earnings trend

Quarterly revenue · Operating profit

₩12.5B-₩2.5B25Q2₩13.4B-₩4B25Q3₩13B-₩4.6B25Q4₩12.6B-₩3.8B26Q1₩11.6B-₩3.9B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩75.9B-₩16.3B2022₩67.6B-₩15.1B2023₩59.9B-₩15B2024₩53.1B-₩15B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩12.5B	-₩2.5B	−19.9%
2025Q3	₩13.4B	-₩4B	−30.1%
2025Q4	₩13B	-₩4.6B	−35.5%
2026Q1	₩12.6B	-₩3.8B	−29.8%
2026Q2	₩11.6B	-₩3.9B	−33.4%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩75.9B	-₩16.3B	-₩18.6B	−21.5%	−8.0%	103.2%
2023	₩67.6B	-₩15.1B	-₩29.7B	−22.4%	−15.0%	136.7%
2024	₩59.9B	-₩15B	-₩31.3B	−25.0%	−18.8%	160.3%
2025	₩53.1B	-₩15B	-₩32.5B	−28.2%	−23.7%	206.9%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23

Earnings analysis

On a confirmed consolidated basis, Daegu Department Store's revenue declined for four consecutive years, from KRW 75.9 billion in 2022 to KRW 67.6 billion in 2023, KRW 59.9 billion in 2024, and KRW 53.1 billion in 2025.

Over the same period, the operating loss stayed at a similar absolute scale each year (KRW 16.3 billion in 2022, KRW 15.1 billion in 2023, KRW 15.0 billion in 2024, and KRW 15.0 billion in 2025), but because revenue kept shrinking, the operating margin worsened from -21.5% in 2022 to -28.2% in 2025.

The net loss attributable to owners widened every year, from KRW 18.6 billion in 2022 to KRW 29.7 billion in 2023, KRW 31.3 billion in 2024, and KRW 32.5 billion in 2025, which appears to reflect growing financial costs such as interest expense on top of the operating loss.

On a quarterly basis, the owners' net loss widened from KRW 7.0 billion in Q2 2025 to KRW 8.5 billion in Q3 2025 and KRW 8.7 billion in Q4 2025, narrowed somewhat to KRW 7.2 billion in Q1 2026, then widened again to KRW 8.6 billion in Q2 2026.

Over the trailing four quarters (Q3 2025 through Q2 2026), the cumulative owners' net loss reached about KRW 32.9 billion, underscoring that the annual loss trend has continued.

Operating cash flow was negative in all four years, from -KRW 14.6 billion in 2022 to -KRW 26.2 billion in 2023, -KRW 28.4 billion in 2024, and -KRW 26.8 billion in 2025, showing that not only accounting profit but actual cash generation has continued to deteriorate.

The debt ratio rose steadily from 103.2% in 2022 to 136.7% in 2023, 160.3% in 2024, and 206.9% in 2025, clearly reflecting growing balance-sheet fragility.

Owners' equity fell from KRW 231.4 billion in 2022 to KRW 137.1 billion in 2025, a decline of about KRW 94.3 billion, illustrating how the accumulating annual net losses have been eroding capital.

Industry analysis

The Daegu department store market is contested by large stores affiliated with Lotte, Shinsegae, and Hyundai Department Store Group, and Daegu Department Store is regarded as the last remaining locally rooted department store operator among them.

Within the industry, the prevailing view emphasizes the value of the real estate assets located in Daegu's core commercial district rather than the retail business itself.

The fact that the former Daebaek Outlet building is now leased to Hyundai Department Store Group and operates as Hyundai City Outlet Daegu is cited as an example of a major retailer utilizing Daegu Department Store's real estate to enter the local market.

Stagnant regional population growth and expanding online shopping penetration are exerting structural pressure on offline department stores generally, and Daegu Department Store—operating as a single store (Daebaek Plaza) without its flagship—is more exposed to this pressure.

The company's repeated attempts at and failures in selling control illustrate how difficult it is for a standalone regional department store to raise capital and restructure its business on its own.

At the same time, the sequence of varied prospective buyers since 2022—JHB Holdings, Cha Bio Group, Segyeong Invest/Aram Korea, and Leango Partners—reflects sustained market interest in the real estate assets the company holds.

Outlook

Daegu Department Store disclosed that on August 25, 2026, even the replacement buyer, Leango Partners—which had taken over from Segyeong Invest and Aram Korea—failed to pay the second installment of KRW 7 billion by the deadline, causing the contract to be terminated, with the previously paid KRW 3.4 billion forfeited to the seller as a penalty.

The company stated that it has no concrete plan regarding future sale or management strategy following the contract termination.

The blueprint that Segyeong Invest had presented during its acquisition process—joint public-private redevelopment of the flagship store, converting Daebaek Plaza into a mixed-use cultural space, and shifting the retail structure toward an online platform—now has an uncertain path to execution given the contract's collapse.

The task force that the Jung-gu district office had been considering to relocate its aging government building into the Daegu Department Store flagship site was also premised on the change in majority ownership, so its progress will need to be reconfirmed going forward.

The company is known to have historically managed its funding by rolling over long-term borrowings on an annual basis, meaning short-term liquidity management is likely to re-emerge as a key focus following this failed sale.

Given that Daegu Department Store has now seen a total of four sale or acquisition attempts fail across 2022, 2023, and twice in 2026, any new prospective buyer that emerges is likely to face careful market scrutiny of its ability to actually fund and complete a deal.

Valuation

PER

—

PBR

0.3×

ROE

-23.9%

EPS

-₩3,779

BPS

₩13,962

Dividend per share

₩0

On the earnings side, the sustained multi-year net loss attributable to owners makes a conventional price-to-earnings ratio largely uninformative for this stock.

On a net-asset basis, however, the current share price sits well below the company's own calculated book value per share, with the price-to-book ratio trading far under 1x.

This discount can be read as a composite reflection of repeated failures to sell control or assets, ongoing capital erosion, and the shrinking core retail business.

On the dividend side, no dividend has been paid amid several consecutive years of accumulated net losses, making shareholder-return expectations through dividends difficult to form at present.

The value the market assigns to this stock appears to hinge heavily on whether real estate disposals or redevelopment eventually succeed and on the pace of balance-sheet repair, factors that are not easily captured by operating performance forecasts alone.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-08-23

Bull factors

Prime Dongseong-ro Real Estate Holdings

The company owns numerous real estate assets located in Daegu's core commercial districts, including the former Dongseongno headquarters building, Daebaek Plaza, the former outlet building, and a distribution center.

The case of the former outlet building being leased to Hyundai Department Store Group and operated as Hyundai City Outlet demonstrates that these assets are attractive locations even for large retailers.

Should redevelopment or spin-off sale be realized in the future, there is room for these asset values to be reassessed.

Recurring Buyer Interest Signals Persistent Market Attention

Since 2022, various prospective buyers with different characteristics—including JHB Holdings, Cha Bio Group, Segyung Invest·Aramco Korea, and Lee&Go Partners—have pursued acquisition and sale deals.

Although none of these contracts were completed, the repeated interest shown by diverse capital sources suggests the market's potential valuation of the company's assets. This leaves open the possibility that other types of prospective buyers may emerge again in the future.

Deep Discount to Net Asset Value

The current stock price is trading at a considerably low level relative to the company's self-calculated book value per share, with the price-to-book ratio significantly below 1x.

This coexists with an interpretation that the market is not fully reflecting the company's real estate and asset value, and a contrasting interpretation that it reflects substantive financial risk.

Bear factors

A Track Record of Four Failed Sale/Acquisition Attempts

The sale to JHB Holdings in 2022, management rights negotiations with Cha Bio Group in 2023, and the equity sale contracts with Segyung Invest·Aramco Korea and the subsequently substituted Lee&Go Partners in 2026 all fell through due to funding payment issues.

The repeated contract terminations are a factor amplifying market skepticism about the prospective buyers' fundraising capabilities. Even if new acquisition attempts emerge in the future, scrutiny of contract execution feasibility may become even more stringent.

Four Straight Years of Revenue Decline and Widening Net Losses

Annual revenue continuously declined from KRW 75.9 billion in 2022 to KRW 53.1 billion in 2025, while net loss attributable to controlling shareholders expanded from KRW 18.6 billion to KRW 32.5 billion over the same period. Operating margin also deteriorated from -21.5% in 2022 to -28.2% in 2025.

Given the business structure of operating as a single store without a flagship location, it is difficult to find a substantive catalyst for revenue recovery.

Rising Debt Ratio and Persistent Cash Outflow

The debt-to-equity ratio surged from 103.2% in 2022 to 206.9% in 2025, and operating cash flow recorded negative figures for four consecutive years. Shareholders' equity declined from KRW 231.4 billion to KRW 137.1 billion over the same period, indicating ongoing capital erosion. Without new capital inflows, it appears difficult to reverse this trend of deteriorating financial structure.

Risk factors

Liquidity and Financial Risk

With operating cash flow negative for four consecutive years and the debt-to-equity ratio exceeding 200%, it is known that the company has been managing its funds by rolling over long-term borrowings annually. If new capital raising is delayed, the burden of short-term liquidity management could increase. The repeated use of interim liquidity measures such as treasury stock disposal also illustrates this pressure.

Ownership and M&A Uncertainty

With four attempts at sale and acquisition since 2022 all falling through due to funding payment issues, it remains difficult to pinpoint the timing of management stability and financial improvement through asset sales.

As the company itself has stated it has no specific plans going forward, the emergence of new prospective buyers and whether contracts will be completed remain highly uncertain variables.

Structural Industry Risk

Population stagnation in the Daegu region and the expansion of online shopping are exerting structural pressure on the offline department store industry as a whole.

Daegu Department Store, whose flagship store has been closed for nearly five years, is particularly vulnerable to this pressure due to its single-store system, and its relative position in competition with large retailers may continue to weaken.

What to watch next

Mid-November 2026 (around the statutory deadline for the Q3 quarterly report)
Confirm through the official quarterly filing whether Q3 2026 revenue and operating losses follow the same pattern seen over the trailing four quarters (declining sales, continued net losses).
At the time of any new control-related contract or disclosure
If a new prospective buyer emerges, it will be important to check how the down payment, installment structure, and funding method are designed, given that these were the exact points that caused prior deals to collapse.
Upon disclosures regarding the maturity or rollover of short- and long-term borrowings
Given persistently negative operating cash flow, it is worth checking whether borrowing maturities continue to be rolled over smoothly and whether funding costs are changing.
Upon follow-up announcements regarding the Jung-gu district office's feasibility study or task force on relocating its headquarters
It is worth checking whether discussions about relocating a government office into the flagship store site continue even after the ownership sale collapsed, and if so, how they take concrete shape.

Overall view

Daegu Department Store's control-sale contract collapsed for a second time within a single deal cycle in August 2026, after even the replacement buyer failed to pay the second installment, marking the fourth failed sale or acquisition attempt following setbacks in 2022 and 2023.

This underscores both the market's persistent interest in the company's real estate holdings across Dongseong-ro, Daebong-dong, Sincheon-dong, and Sinseo-dong, and how difficult it has proven to find a buyer with the actual financial capacity to complete the deal.

According to the confirmed financials, revenue fell for four consecutive years from KRW 75.9 billion in 2022 to KRW 53.1 billion in 2025, the owners' net loss widened from KRW 18.6 billion to KRW 32.5 billion, the debt ratio rose from 103.2% to 206.9%, and operating cash flow was negative in all four years.

At the same time, the current share price trades at a substantial discount to the company's own calculated book value per share, reflecting a divergence between the market's view of the operating performance and of the underlying asset value.

The company has not disclosed any concrete plan following the contract termination, and it remains unconfirmed whether a new control-sale or asset-sale attempt will be pursued, or whether a separate normalization plan will instead be developed under the current ownership structure.

Investors may wish to monitor upcoming quarterly disclosures, any new control-related contracts, and how the company manages its borrowing maturities as its direction becomes clearer.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.