Department Stores Rush to Attract 'Designer Brands' Amid MZ Generation Word-of-Mouth Buzz

Create a dedicated section featuring only designer brands
Department stores increase MZ customers
Designer brands achieve 'win-win' through expanded distribution channels

Photo of the 'Hago House' store at Lotte Department Store Incheon Branch. (Photo by Lotte Department Store)

[Asia Economy Reporter Jeon Jinyoung] Recently, the department store industry has been focusing more on discovering unique designer brands rather than bringing in well-known fashion brands such as overseas luxury labels. In fact, as the entry of designer brands has translated into sales performance, the industry is actively seeking designer brands that have gained word-of-mouth in Hannam and Seongsu-dong or are distributed only online.

According to Lotte Department Store on the 13th, the online fashion platform ‘Hago House,’ launched last month at three stores, recorded sales of over 50 million KRW during the first weekend of each store’s opening. Hago House features designer brands popular among people in their 20s and 30s, such as ‘Matang Kim,’ which has a showroom in Seongsu-dong. Currently, female customers account for more than 80% of the customer base, and those in their 20s and 30s make up more than half of all customers. The women’s designer brand ‘#16,’ which opened at the Dongtan branch, recorded monthly sales of 100 million KRW, ranking among the top five women’s clothing brands in sales at the Dongtan store. Lotte Department Store plans to continue focusing on discovering designer brands, including opening ‘WMM Studios’ and ‘MLLG’ at Lotte World Mall in the second half of this year.

Shinsegae Department Store has launched a designer brand specialty section. The ‘New Contemporary Specialty Section’ newly introduced at the Gangnam branch, featuring 14 designer brands, saw sales increase by 32.4% compared to the previous year from the 1st to the 11th of this month. Building on this growth, Shinsegae plans to open a New Contemporary Specialty Section of about 2,000 pyeong at the Centum branch in the second half of next year.

The Hyundai Seoul has showcased 160 domestic fashion brands since its opening. It has supported the opening of pop-up stores or entry of brands that had never operated offline stores before, such as ‘In Silence’ and ‘Thisisneverthat.’ A Hyundai Department Store Group official said, “Designer brands have mainly operated online and were reluctant to run offline stores due to difficulties in manpower management, customer service, and logistics. By supporting these aspects, The Hyundai has broadened the customer base.” Hyundai Department Store also plans to continue creating 2030 specialty sections focused on designer brands at major stores, starting with the renewal of the 2030 specialty section at the Pangyo branch.

The industry’s push to attract designer brands targets the MZ generation (Millennials + Generation Z). Since the MZ generation has high demand for brands popular on online platforms, the strategy is to align with this trend. Above all, department stores can secure new customers while introducing fresh content, and designer brands can easily enter offline markets using the department stores’ infrastructure, creating a ‘win-win’ situation.

An industry insider said, “Recently, department store fashion merchandisers (MDs) are competing to attract brands that are trending in Hannam and Seongsu-dong. The MZ generation does not just follow brand trends but exhibits diverse consumption patterns, such as one consumer trying multiple fashion styles. The industry is also attempting to adapt to these changes.”

This content was produced with the assistance of AI translation services.