Lotte Group renewed the operating license for one of its two duty-free stores in downtown Seoul, while retail giant Shinsegae and heavy industries-focused conglomerate Doosan won the rights to open new stores in the capital, the Korea Customs Service said Saturday.
Lotte, the nation‘s top duty-free operator and the world’s third-largest, was able to keep one store in Myeongdong, a major shopping district in the capital, while losing the other at Lotte World Tower in the affluent Gangnam region whose operating license expires next month.
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| The main Lotte Department Store in central Seoul (Yonhap) |
SK Networks, a unit under SK Group, also has to close its duty-free store in the Sheraton Grand Walkerhill Hotel, in the northeastern part of the capital, after 26 years of operation.
It is the first time that an existing duty-free operator has lost a license in the new open competition every five years by the customs service under a law that took effect in 2013.
Shinsegae won the right to open its first duty-free store at its department store in Myeongdong, adjacent to Lotte‘s shop, paving the way for the retail giant to strengthen its mainstay business.
“We will develop tourism infrastructure to draw more foreign tourists,” Sung Young-mok, Shinsegae DF president, said.
The retailer, which also operates No. 1 discount chain E-Mart, maintained the right for its store in the southern port city of Busan.
The company said it will move the current store to Shinsegae Centum City, which is registered in the Guinness Book of World Records as the largest shopping complex in the world.
For Doosan, opening its first duty-free store in the Dongdaemun area is expected to help the conglomerate diversify its business portfolio.
“We will work with shop owners in Dongdaemun market to develop Dongdamun as one of the representative tourism destinations in Seoul,” President Dong Hyun-soo said.
Dongdaemun is the second most visited shopping district by foreigners following Myeongdong, crowded with shoppers hunting for designer clothes at cheap prices. Doosan Tower is also close to Dongdaemun Design Plaza, the newest landmark designed by world-renowned architect Zaha Hadid.
The competition was tightly contested by local retailers in search of new cash cows amid lackluster domestic demand. Duty-free operations have emerged as one of the most lucrative businesses in tandem with a sharp influx of deep-pocketed shoppers from China.
Last year, the six duty-free stores across the capital, mostly dominated by Lotte, posted combined sales of 4.4 trillion won.
Sales by the Lotte Duty Free branch in the Myeongdong area accounted for a whopping 45 percent of the total. (Yonhap)
