Shinsegae Inc., South Korea's leading retail chain, has turned a corner in the duty-free business as its new flagship branch posted its first turnaround last month amid fierce industry competition, company data showed Wednesday.

Shinsegae DF, the conglomerate's affiliate in charge of its duty-free business, said the Myeongdong branch recorded 1.2 billion won ($1.05 million) in operating profit in January, with sales coming in at 75 billion won. 

The company said in a statement that it is the first month that the store, located in the popular tourist district in central Seoul, showed in the black, nine months after its opening in May last year.

According to market reports, Shinsegae DF had posted an operating loss of 12.5 billion in the fourth quarter.

Shinsegae DF said that the company will be able to achieve its daily revenue target of 4 billion won down the road, given the improved result and that the daily sales growth is settling in at an average of 3.8 billion won.

Shinsegae got the final nod to run the Myeongdong store from the customs office in 2015, subsequently winning the bid to open another branch in its department store in Gangnam in the latter half of this year.

Currently, duty-free operators in Korea are required to renew the license through bidding to keep their stores running under the new law amended in 2013 aimed at curbing market monopoly.

The retail giant, owned by of the sister of the now bedridden Samsung Group's patriarch Lee Kun-hee, has been investing heavily in the duty-free business in the country where the continuous inflow of deep-pocketed Chinese visitors has became a fresh profit source for big retail firms.

Other players have joined the race, with HDC Shilla Duty Free-- a joint venture between Hotel Shilla Co. and Hyundai Development Co. -- also turning to profit in January about a year after its opening.

With the competition getting tougher, the duty-free industry is tasked with survival, as most existing players, in contrast, have fared worse in recent quarters.

Hanwha Galleria, an affiliate of Hanwha Group, logged an operating loss of 43.8 billion won in 2016, with its executives and staff opting to give up part of their salaries. Another rival Doota Duty Free Shop, run by Doosan Group, is estimated to have recorded a loss of 30 billion won last year. (Yonhap)