Shinsegae reopens store, rivalry

The battle between the two biggest retailers in Korea ― Shinsegae and Lotte Shopping ― is about to begin again. Shinsegae, which opened an annex at its head store in downtown Seoul in August 2005, is reopening its main building after four-and-a-half years of renovation, said company head Seok Kang.
The main building deals only in myeongpum, or luxury goods, placing it in direct competition with Lotte Shopping’s Avenuel, which opened in February 2005. Each store is within walking distance of the other.
“Our store has history and elegance,” said Mr. Kang, chief executive officer of Shinsegae’s department store division. “We are not only aiming for customers living north of the Han River, but will attract demand for luxury products in the southern Han River area. A true competition with Lotte will take place.”
Shinsegae is targeting annual sales of 120 billion won ($128 million) for the first year after the renovation. Its rival Lotte currently boasts 135 billion won in sales at Avenuel. Including the annex, the main Shinsegae store hopes for 500 billion in sales this year.
“Goals should be set higher that what is actually possible,” said Mr. Seok, hinting that the store has a long way to go. Lotte recorded 1.4 trillion won in sales at its main store in downtown Seoul.
The main building, which was originally the Seoul branch of Japan’s Mitsukoshi department store and is the oldest commercial building in Korea, will house artwork by renowned artists: Henry Moore, Joan Miro, Claes Oldenberg and others. Shinsegae spent more than 35 billion won for the art.
Shinsegae’s biggest distinction may be its Hermes shop. “This is the first time Hermes will open a store in Gangbuk [north of Han River],” said Mr. Seok. “Most of the well-known brands may overlap with Lotte’s, but Hermes is exclusively placed in Shinsegae.” Hermes is considered one of the top three luxury brands here, with Chanel and Louis Vuitton.
But Lotte is prepared to compete with Shinsegae’s reopened store.
“Our store can be accessed more conveniently than Shinsegae, but we will not only rely on this advantage. Aggressive marketing strategies will also be conducted,” said a Lotte executive who declined to be identified.

By Hwang Young-jin Staff Writer [yhwang@joongang.co.kr]