Shinsegae Department Store, South Korea’s leading retail business operator, said on Thursday its flagship store in Gangnam, an upscale district in southern Seoul, posted an estimated 3 trillion won ($2.3 billion) in sales revenue this year – a record high for a single branch.
It is rare for a single department store branch to post 3 trillion won in annual sales even on a global scale, analysts said.
Last year, only a couple of department stores worldwide saw their sales revenue rise to that level; Harrods in London with 3.64 trillion won in sales and Isetan’s Shinjuku branch in Tokyo with 3.16 trillion won.
Shinsegae’s Gangnam branch opened in 2000 and reached the 1 trillion won sales mark in 2010 – the fastest among Korean department stores. The branch achieved 2 trillion won in sales in 2019.
Shinsegae attributed its decent sales growth at its Gangnam branch to a strengthened lineup of top-tier luxury brands such as Hermes, Louis Vuitton and Chanel as well as its business focus on millennials and Generation Zers, a newly emerging consumer group.
In addition to high-end consumers, Shinsegae has taken several measures to lure young consumers to its products.
In August 2022, the Gangnam branch opened the New Contemporary Special Zone on the fifth floor, targeting young consumers.
The branch has also undergone renovations several times this year, including those on a golf section, a premium sports specialty section and a fashion zone for young adults.
Shinsegae's Gangnam branch opened a Hello Kitty pop-up store in November 2023 Its focus on Generation MZ, or people born in the early 1980s to early 2000s, has resulted in a 95.6% increase in street casual wear sales and a 51.6% rise in sportswear and outdoor clothing sales this year.
The company said MZers account for 40% of its entire consumers at the Gangnam branch.
TARGET CONSUMERS
Chung Yoo-kyung, a Shinsegae Inc. president in charge of the conglomerate’s department store business, has stressed the importance of sales and marketing for target consumers.
A prime example is the launch of The Stage, an exclusive pop-up space within the department store, which generated 20 billion won in sales across Shinsegae Department Store branches in Korea this year.
The New Street section at Shinsegae Department Store's Gangnam branch Shinsegae said it will continue with its drastic renovations at the Gangnam branch to attract consumers, including expanding the size of its food section to 19,800 square meters – the section’s first expansion in 15 years.
“As a global department store representing Korea, we will not just provide a shopping space for our consumers. We will strive to become a content provider for them,” said Park Ju-hyung, chief executive of Shinsegae Department Store.
In a September executive reshuffle, Shinsegae Group named Park, CEO of Shinsegae Central City, the group’s property development affiliate, to concurrently lead Shinsegae Inc., the operator of Shinsegae Department Store.
Write to Young Chan Song at 0full@hankyung.com In-Soo Nam edited this article.
