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Retail

Shinsegae to invest about $900 mn in department stores

New store to be opened with luxury names such as Bottega Veneta, Saint Laurent, Tom Ford and Piaget

By Aug 11, 2021 (Gmt+09:00)

1 Min read

Daejeon Shinsegae Art & Science. Shinsegae is set to open the new store on Aug. 27.
Daejeon Shinsegae Art & Science. Shinsegae is set to open the new store on Aug. 27.

South Korea's retail giant Shinsegae Group will invest 1 trillion won ($866 million) in local department stores this year to reinforce the business that has helped cope with the COVID-19.

The COVID-19 crippled offline stores’ profits last year, but some of them, especially department stores, enjoyed a recovery in their earnings partially due to "revenge shopping," a post-lockdown rush to purchase luxury goods. Shinsegae also benefited from the trend.

The country’s second-largest department store operator reported 123.6 billion won in operating profit on a consolidated basis during the first quarter, increasing by whopping 37 times from a mere 3.3 billion won a year earlier, as its major branches attracted shoppers who spend money on items and experiences that they have felt deprived of during the pandemic.

Shinsegae Co. is scheduled to open a new department store in Daejeon, about 150 km south from the capital city of Seoul, on Aug. 27. The company invested 650 billion won in Daejeon Shinsegae Art & Science, its first new store in five years. Luxury brands such as Bottega Veneta, Saint Laurent, Tom Ford and Piaget are set to open boutiques in the third-largest department store among Shinsegae’s branches.

The store is located in Shinsegae’s new 43-story building, which also has a science museum and a sport theme park. In addition, the company will operate a five-star hotel called “Onoma”.

In Seoul and the surrounding area, its flagship Gangnam branch, for example, moved luxury brands to the second and third floors, making the first floor for cosmetics with about 50 makeup brands. The branch’s third floor, which was renovated last year, became famous as it displayed about 120 artworks between shops to sell.

The company also considers transforming a building next to its headquarters in Seoul, which it bought from Standard Chartered Bank Korea Ltd. in 2015, into a department store by 2023.

Write to You-Chung Roh at yjroh@hankyung.com
Jongwoo Cheon edited this article.
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