Hyundai Department Store in duty-free partnership

Industry

Published: 12 May. 2015, 20:19

Hyundai Department Store in duty-free partnership

Hyundai Asan executive Kim Young-soo (from left); JNG Korea CEO Kim Seong-min; Suhansa CEO Kim Gwang-wook; Hyundai Department Store CEO Lee Dong-ho; Modetour Network Vice President Yang Byung-seon; Entas Duty Free Vice President Lee Seung-gyu; and S.J. Duko executive Jeon Byung-mahn celebrate the founding of Hyundai DF. Provided by the company

Hyundai Department Store and its medium-sized partners have established a new company, Hyundai DF, to establish a foothold in the duty-free business, the department store chain said Tuesday.

Hyundai Department Store controls 50 percent of Hyundai DF, with Han Moo Shopping, a joint venture of Hyundai Department Store and Korea International Trade Association, owning a 20 percent stake.

Modetour Network, one of the country’s major online tour agencies, will control 17 percent and the remaining stake will be owned by a group that includes Entas Duty Free, which is a shop operator in the Incheon area; Suhansa, operator of Ambassador Hotels; Hyundai Asan; and S.J. Duko, local owner of brands including S.T. Dupont Paris and Zadig & Voltaire.

“We have decided to set up a joint venture with partners to realize a business model based on the cooperation between a conglomerate and small and midsized companies,” a Hyundai Department Store official said.

The company said the partnership brought together experts in retail, the duty-free business, tourism, hotels and fashion.

Initial investment will be 10 billion won ($9.1 million) and gradually increase to 150 billion won, according to Hyundai.

Hyundai Department Store last month announced plans to open a duty-free shop at its southeastern Seoul branch in Samseong-dong, which is at the center of a so-called MICE (meetings, incentives, conferences and events) tourism complex to be built by Seoul Metropolitan Government.

Its COEX branch in Samseong-dong is minutes away from upscale hotels and SM Town, a Hallyu themed complex popular among foreign tourists.

Three licenses to open and operate duty-free shops in Seoul are scheduled to be issued by the Korea Customs Service in July, with two of them expected to be given to conglomerates and one to a midsize company.

SK Networks, which operates the Walkerhill duty-free shop in northeastern Seoul, is said to be planning a shop at the Cerestar building in Dongdaemun, central Seoul.

Shinsegae Group also recently said it will set up Shinsegae DF, to strengthen its duty-free business. Korea’s No. 2 retailer is widely expected to confirm plans for a duty-free shop at its central Seoul department store.

Hanwha Galleria also has released plans for a duty-free shop at the 63 Building in Yeoeuido, a 250-meter (820-foot) high landmark in Seoul and one of the most popular shopping-to-entertainment arenas in the country, which is owned by Hanwha Life.

BY PARK JUNG-YOUN [park.jungyoun@joongang.co.kr]