Olive Young backs out of Seongsu Station naming rights deal

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Olive Young backs out of Seongsu Station naming rights deal

Published: 17 Nov. 2024, 15:08

KIM JU-YEON
[email protected]

Pedestrians walk by a Olive Young store in Myeong-dong, central Seoul. [CJ OLIVE YOUNG]

Cosmetics retail giant Olive Young has canceled its plans to include the brand's name in Seongsu Station, a subway station in eastern Seoul that it had won naming rights for with a bid of 1 billion won ($716,400) in August.

Olive Young will instead use the funds for its Seongsu stores' infrastructure, the retail chain said in a statement.

The company will have to pay a fine worth 10 percent of its bid, around 100 million won, as a penalty for cancelling the deal, according to Seoul Metro.

The health and beauty store had won an open auction for the naming rights to the station on the city's Line 2 as announced by Seoul Metro on Aug. 9. It was awarded a three-year contract with the option of guaranteed renewal for its 1 billion won bid, an amount that had exceeded the appraisal value of 299.48 million won.

It was reported at the time that Olive Young would go with the name "Seongsu (CJ Olive Young) Station," but the chain said it had not made a decision then.

Olive Young did not provide a reason why it was pulling out of the deal in its statement. The public reception of Seongsu Station's renaming, however, had been divided when the news broke. Those who supported the deal cited the need for Seoul Metro to secure revenue without raising transportation fees, while others protested a private company's name being included in a public service.

"Whenever I hear a company's name as part of a station I think poorly of the firm. It feels like the company bought publicity with money and as if it's the peak of capitalism but in a bad way," a user on X said on Aug. 12.

Olive Young is Korea's largest drugstore chain, with a market share of around 80 percent in the offline industry. It will be opening its first Olive Young N store — a space with brand merchandise, a members lounge and pop-up areas — at the Factorial Seongsu building near Seongsu Station on Nov. 22.

BY KIM JU-YEON [[email protected]]