SOUTH KOREA REPORT: CITY PLUS City Plus terminates Gimpo L&T & GM concession
City Duty Free has reported better-than-expected sales at its new Incheon Airport T2 shops as it prepares to open a Seoul downtown store this year. However, it has recently announced that it will pull out of its Seoul Gimpo Airport concession. David Hayes investigates.
outlets, City Duty Free currently operates five duty free shops at the T1 main terminal building, and at Incheon Seaport Ferry T2. City’s five T1 shops comprise
fashion accessories and general merchandise; liquor and tobacco; perfume and cosmetics; South Korean SME products store ‘I am Shopping’; and branded fashion divided into three boutiques for Versace, Moschino and Aquascutum. Hong notes that Asiana Airlines will
transfer its flights to the T1 east wing now that Korean Air has transferred its T1 east wing flights to the newly opened T2. Meanwhile, Asiana’s vacated
Above: City Duty Free has faced tough trading conditions at its original Gimpo Airport shop.
C
ity Plus, one of South Korea’s leading small medium enterprise (SME) duty
free operators, is reporting better than expected sales at Incheon International Airport. It began operations in two
SME outlets (DF6) at the airport on 18 January, when T2 opened officially. City Plus, which trades as City
Duty Free, operates a 130sq m food and souvenir shop and a 100 sq m fashion boutique displaying two brands – Kenzo and Lancel – at the Incheon T2 central airside departure shopping area. “Our Incheon T2 stores are located
mid-way in the terminal centre, there is good access and visibility,” comments City Duty Free Senior Managing Director Merchandising Division Allen Hong. “Even though the outlets are
small, customer access is good. Sales are better than expected.
City Duty Free will now open its 3,000 sq m duty free shop on the third floor of a six-storey commercial complex in Shinchon, which is being renovated and redeveloped.
TRBusiness 124 TRBUSINESS “We chose Kenzo for women’s and
men’s apparel as it’s a trendy fashion brand and is becoming popular in China. There are a limited number of other duty free stores with Kenzo. Sales are satisfying – it’s half and half, men’s and women’s apparel.” Lancel, which Hong claims is the
only boutique in South Korea at present, is expected to appeal to South Korean and foreign customers. “We chose Lancel as previously
the bags were popular in South Korea around the early 2000s, so we re-launched the brand here in our T2 store,” he explains. City Duty Free has chosen a
compact design for its food and souvenir shop that maximises the use of the limited space and attracts passing passengers. South Korean customers account for about 60% of purchases, Chinese passengers at about 30%, with remaining items bought by the Japanese and other travellers.
Steady growth Operations have grown quickly during the past three years and currently total five SME duty free concessions, including a licence for a downtown duty free store in Seoul that is due to open later this year. In addition to the two new T2
west wing flight slots will be taken up by foreign carriers and LCC airlines transferring from the T11 concourse. The change of airlines will present
City Duty Free and other operators in T1 west wing with a new mix of passengers who will visit its shops and boutiques. “We are planning to renovate our
T1 fashion accessory and general merchandise shop,” says Hong. “We will introduce new imported
and South Korean fashion brands; we are deciding which brands will leave the shop to create space.” City Duty Free’s T1 shops currently
serve a high number of South Korean customers due to their proximity to Asia’s flight departure gates. The mix of nationalities is likely to
change after Asiana’s flights transfer to T1 east wing and City Duty Free is taking this into account. “Half of our T1 five-year concession
period is left, so it’s a good time to replenish the store,” Hong continues. “We will do this during Spring.”
Downtown entry Meanwhile, City Duty Free is preparing to enter South Korea’s downtown duty free market with the planned opening of a store in the capital’s western Shinchon district due later this year. Originally planned
MAY 2018
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