Meet Cheongdam, the trendiest street in Korea

[Glimpse of Business in Seoul 28th series: Cheongdam Luxury Street]

Dec 15,2008
A window display beckons on Cheongdam “luxury street,” southern Seoul, which boasts almost every foreign luxury brand. By Jeon Min-kyu
People say Cheongdam-dong in southern Seoul is the country’s wealthiest and trendiest area. For ordinary citizens, that often translates as “unapproachable.”

The Cheongdam “luxury street,” stretching from Galleria Department Store to the Cheongdam crossroad, boasts almost every famous fashion line, including Louis Vuitton, Giorgio Armani, Gucci, Salvatore Ferragamo, Prada and Dolce & Gabbana.

More than 50 buildings line both sides of the street, housing a number of car dealers, a couple of banks and brokerages, and dozens of plastic surgery and dermatology clinics. In recent years, branches of some well-known local and foreign art galleries have launched showrooms in Choengdam - Seomi & Tuus, Gana Art Center and Opera Gallery.

Although there is one bus stop in the middle of the boulevard, no one would dare to step inside those shops directly from a bus. At the door of the shops stand male guards garbed in formal suits.

A couple walk by a Gucci flagship store in Cheongdam Luxury Street, southern Seoul. By Jeon Min-kyu
But on a recent visit to Cheongdam, business appeared to be anything but brisk.

Few cars were parked in front of buildings.

And only a few out of the dozens of stores actually had customers. A shopkeeper at a DKNY shop, when asked why there was not a single customer, said, “It’s because today is a weekday.”

Could these shops actually make ends meet?

According to an industry insider, it doesn’t really matter to the owners of the fashion lines.

“Foreign luxury brands in operation in Korea are very well aware that those flagship stores on Cheong-dam luxury street don’t make a lot of money. In fact, they don’t even expect it,” said the source who declined to be named for security reasons. “Despite that, they are desperate to stay in the district because of brand image. It’s widely known in the Korean fashion circles that you are supposed to have one flagship store on the street if you are a luxury label.”

That could explain why MCM, a Korean brand aiming to go global, is getting ready to set up its own flagship store next to premier American brand Coach. The MCM shop, now under construction, is set to open next year.

Despite the economic downturn that has been dealing a hard blow to the consumer sector, and despite the obvious lack of shoppers, stores in the district don’t seem to be feeling the pinch, says Kim Hyung-soo, who has been running his own realty agency, “Royal Consulting,” in the area for the past three decades.

“No owner in Cheongdam luxury street has put a building up for sale. They seem to have reserves to weather the difficult times.”

A few buildings display “for lease” signs with contact numbers. But calls to those numbers disclosed that the shops are temporarily vacant because of lease expiration, not bankruptcies.

Less than two weeks after the global credit crunch erupted in mid- September, Cartier Korea opened its flagship boutique named Cartier Maison in Cheongdam.

It was only the fourth such store in the world and the first in Asia.

Asked if the company has taken into account the impact of the latest financial turmoil, Cartier Korea president Philippe Galtier said at the opening ceremony that the jewelry brand has gone through many crises before and economic circumstances don’t really affect the buying habits of its well-heeled customers.

Some luxury brand managers say the establishment of Cartier Maison may help bring back the prosperity enjoyed in the 1990s.

Luxury brands started entering into the boulevard in the early 1990s after Hanwha Group launched Galleria Department Store in 1990.

The Galleria used to be identified with luxury because it was the first department store in Korea that specialized in a number of foreign luxury brands that had been unknown to the Korean public.

The street was once filled with imported cars that were rare at the time, driven by those who wanted to boast of their spending power.

But as the country underwent the challenging period of the Asian financial crisis in 1997 and 1998, the luxury district withered and has since apparently come back slowly.

Some shoppers say they would rather go to department stores than the shops in Cheongdam, according to a spokeswoman for an apparel brand.

“You can get hefty mileage points and can buy on installment at department stores. People who still want to go to the Cheongdam luxury street would be those who enjoy some exclusivity,” she said.

The flagship stores on the street offer no distinguishable benefits, price- or product-wise, to those who shop there, she added.

One such exclusive spot is Giorgio Armani. The Armani store takes up an entire building covered by beige-colored bricks, leaving no space for windows. It is impossible for passersby to know what is going on inside.

That is why the flagship store is still a favorite among families of conglomerate royalty, according to the fashion industry source.

To shop for other brands, affluent individuals seeking anonymity often opt for personal shopping services provided to them by department stores such as Shinsegae and Lotte.

With the personal service, these shoppers do not mingle with the crowds, but have goods brought to them in special areas.

Across from the Galleria Department Store stand a dozen secondhand luxury goods stores.

Those shops are now flush with expensive products including Hermes bags costing over 10 million won ($7,286), as more people put their belongings up for sale.

But in these tough times, even these stores face problems.

“We’ve seen an explosive number of customers, probably because of economic hardship,” said an owner of one of these shops. “But not many come to buy. We just see goods piling up.”

By Seo Ji-eun Staff Reporter [spring@joongang.co.kr]

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