April 26, 2024

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[THE INVESTOR] Shinsegae Group announced on Oct. 17 that it is establishing a new entity -- temporarily named Shinsegae Duty Free Global -- after splitting off its duty-free business from Shinsegae Chosun Hotel.

The new entity is likely to be merged with Shinsegae DF, which operates its duty-free store in Seoul. The other outlets that Shinsegae Chosun Hotel operates at Incheon International Airport and in Busan will also be handled by the new firm. 

The Shinsegae board is expected to approve the proposal next month.

The group is reportedly looking to integrate its duty free-related businesses for more efficiency.

“The idea to integrate the duty-free business under a single unit was suggested a while ago, when we established Shinsegae DF in 2015,” a company spokesperson told The Investor. ”This is our first step toward that goal.”

While most local duty-free operators have suffered amid the prolonged diplomatic tensions between Beijing and Seoul over the deployment of the THAAD missile system, Shinsegae has been an exception. Daily sales at its Myeong-dong outlet reached around 4.8 billion won (US$4.24 million) in September.

This catapulted Shinsegae to Korea’s No. 3 duty-free operator, behind Lotte Duty Free and Shilla Duty Free.

Luck continues to be on its side, as the Korea Customs Service has decided to postpone the opening of new duty-free shops on account of dwindling tourists from China.

Shinsegae and others were originally obligated to open a new outlet by the year-end after winning a license in December last year.

By Song Seung-hyun (ssh@heraldcorp.com)