Shinsegae Department Store in Gangnam nears 3 trillion won in annual sales

Shinsegae Department Store in Gangnam [Courtesy of Shinsegae Department Store]

Shinsegae Department Store in Gangnam, an affluent area in southern Seoul, is about to raise 3 trillion won ($2.3 billion) in annual sales thanks to high demand for luxury brand items and innovative trend-setting ideas welcomed by young consumers.

Shinsegae Department Store in Gangnam is projected to report 2.85 trillion won in annual sales this year, according to multiple industry sources on Tuesday. The single outlet was the first to achieve 2 trillion won in annual store transactions in 2019. It passed 2 trillion won even during Covid in 2020 and 2021. Last year, the Gangnam branch grossed 2.5 trillion won to surpass that of Galeries Lafayette in Paris, Isetan Shinjuku in Tokyo and Harrods in London.

The steady rise in sales is attributed to its dedication to top three luxury brands – Hermes, Louis Vuitton and Chanel.

Luxury sales at all Shinsegae Department Store branches are expected to account for 26 percent of total sales, up from 16 percent in 2019 and 25 percent in 2021. Industry insiders projected that consumers will tighten their belts amid the prolonged Covid-19, high inflation, and low growth environment. Luxury sales, however, continued to grow.

Shinsegae Department Store in Gangnam had made efforts to have consumers keep visiting and spending by refurbishing facilities for nearly two years in 2016. The operation area expanded to 26,200 pyong from 16,800 pyong to become the largest single department store by size in Seoul. The retailer placed up luxury brands from first floor to second and third floors and refurbished the first floor with luxury cosmetics brands.

Shinsegae Department Store also displayed 250 artworks such as paintings, photos, and objects on the higher floors to boost premium image.

Sales were also boosted after the retailer created the industry’s first new lower category for VIP consumers spending more than 4 million won a year in 2017 to attract young consumers as their loyal customers.

Lotte Department Store in Jamsil [Courtesy of Lotte Department Store]

Lotte Department Store in Jamsil, southern Seoul, in the meantime, is also expected to report 2.4 trillion won in annual sales this year after topping 2 trillion won for the first time last year.

Eleven department stores including Shinsegae Department Store in Gangnam and Lotte Department Store in Jamsil are expected to achieve 1 trillion won in annual sales this year. They include Lotte Department Store in Myeongdong, central Seoul, and Busan, Shinsegae Department Store in Centum City in Busan, Daegu, and central Seoul, Hyundai Department Store in Pangyo, Samseong-dong, and Apgujeong-dong, and Galleria Department Store in Apgujeong-dong in southern Seoul.

Hyundai Department Store in Pangyo, Gyeonggi Province, is expected to achieve 1.5 trillion won in annual sales this year before joining the 2 trillion won group in 2024. Hermes opened a store inside the outlet for the first time in Gyeonggi Province in October and Van Cleef & Arpels in November. The Hyundai Seoul in Yeouido is expected to achieve 1 trillion won in annual gross sales next year, three years after its opening.

“VIP customers account for up to 40 percent of entire sales at department stores as they are not swayed by the bad economy, which is a sign of increased polarization” said an unnamed industry official.

A rise in annual sales was also affected by higher prices of luxury items due to high inflation and exchange rate and of groceries and other fashion items.