SOUTH KOREA REPORT: SHINSEGAE DUTY FREE
floors, according to Hong, with fashion and accessories spread over two to three floors. The Gangnam store floor layout
and the shopping ambience will be different to the Shinsegae Duty Free Myeong-dong store to avoid competition between the two downtown stores that are located just 6km apart in Seoul. Hong continues: “Our new shop
plan is finished. It’s now under construction. There will be over 12 luxury brand boutiques. The smallest to the largest boutique sizes range from 60 sq m to 112 sq m. “We are discussing positions with
a few fashion brands but pretty much what we planned is on schedule. The fashion brand negotiations will take time. It’s a small number.” Shinsegae’s new duty free store is
located in the Express Bus Terminal transport and shopping complex, which is one of Gangnam’s major shopping destinations housing Famille Street shopping mall, Shinsegae Gangnam Department Store and Gangnam Marriott Hotel. “It’s a very busy location with
access from all around,” Hong explains. “Entry will be on all levels but the main entrances will be on the first floor from Shinsegae Department Store and on the fourth floor from the Marriott Hotel. “For the first year we are targeting
$120m in sales. Our target is Chinese customers for over 50% of sales and South Koreans 40%. Customers will buy pretty much the same goods as in our Shinsegae Duty Free Myeong- dong shop.”
Myeong-dong popularity Seoul’s Myeong-dong shopping district, the location of Shinsegae Duty Free’s flagship shop in Myeong- dong Department Store, is still the most popular destination among Chinese visitors. However, Seoul’s trendy Gangnam district is attracting more young foreign FITs [free independent travellers] to fashion shops in areas such as Apgujeong-dong and Chungdan. “Garosu-gil is a fashion and new
lifestyle street where hip young South Koreans gather, so a lot of young Chinese and Japanese travellers come to visit,” Hong continues. “Our
MAY 2018 Luxury brand boutiques are due to open this year at Shinsegae Duty Free’s new downtown store.
Shinsegae Duty Free Gangnam store will be a new shopping destination in that district. “Brand-wise, our Gangnam shop
portfolio will be a little smaller than in Myeong-dong as the new shop is a little smaller.” Returning to Myeong-dong,
Shinsegae Duty Free is targeting a 40% increase in sales this year. The flagship downtown duty free store features new international and South Korean merchandise, along with a collection of top-line luxury brands, which are being added to this year. Work currently is in progress
constructing the store’s Chanel boutique that is due to open in October on the 8th floor, following last year’s opening of its Louis Vuitton and Christian Dior boutiques on the same floor in September. “Chanel started constructing
their boutique in May 2017,” Hong says. “Now there are temporary boutiques for Moschino, Salvatore Ferragamo and Tod’s in the space. “They will move to the 9th
floor in the second half this year. Some existing 9th floor brands will relocate on the same floor and some will leave. “We are remodelling our 9th
floor fashion display. There will be some rearrangement for efficiency and performance.” Shinsegae Duty Free’s current top
luxury brands in Myeong-dong are Tiffany & Co., Bulgari, Gucci, Louis Vuitton, Van Cleef & Arpels and
Cartier, which are all performing well according to Hong. Shinsegae Duty Free has set a revenue target of $1.7bn for its Myeong-dong downtown store this year after achieving ahead-of-target sales of $1.2bn at the flagship store in 2017.
Online sales burst Seperately, online sales now account for one third of total sales in the flagship store and are expected to grow further this year. “We are happy with our Myeong-
dong downtown shop because of the performance,” explains Hong. “We are a newcomer to Seoul
duty free downtown retailing and already we have become a top three operator. Our sales were better than we targeted. “So far so good; extra sales will
come from perfume and cosmetics, and fashion. We will open Chanel boutique in October; also, we are
“Shinsegae Duty Free recorded total sales worth $1.6bn in 2017 at Incheon International Airport and at its two downtown stores in Seoul and Busan.”
Hong Seok Ho,
Senior Vice President Duty Free Merchandising Division, Shinsegae Duty Free
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