April 20, 2024

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[THE INVESTOR] Shinsegae on Dec. 12 announced that it has decided to inject 75 billion won (US$68.70 million) into its new duty-free outlets that are set to open next year.

The Korean retail giant will invest the funds through 150 shares issued by its duty-free affiliate Shinsegae DF at 50,000 won per share. It will account for more than one-third of the unit’s total assets of 300.6 billion won.

“Most of the funds will be used to finance our new duty-free stores,” a Shinsegae DF spokesperson told The Investor. The duty-free operator plans to launch new outlets in Incheon International Airport and Gangnam.

 

The Shinsegae affiliate was selected in June to operate an outlet in Terminal 2 of Incheon airport. The Gangnam outlet is also set to be launched next year, but a specific date has not yet been decided.

The Korean firm has been trying to aggressively expand its duty-free business. Shinsegae in July also injected 40 billion won in its duty-free firm by buying newly issued stocks. The funding was mainly used for Shinsegae DF’s outlet in Myeong-dong which was launched in May 2016. Daily sales at the outlet reached around 4.8 billion won in September, which catapulted Shinsegae to Korea’s No. 3 duty-free operator, behind Lotte Duty Free and Shilla Duty Free.

“Funding our new business cannot be done overnight. We are trying to consistently fund and support our new outlets,” the company spokesperson said.

Moreover, Shinsegae in December established a new entity Shinsegae Duty Free Global after splitting off its duty-free business from Shinsegae Chosun Hotel. The new entity, which operates outlets at Terminal 1 of Incheon airport and in Busan, is likely to be merged with Shinsegae DF for more efficiency.

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