'Hanwha 3rd Son' Kim Dong-seon Expands Galleria Shares Early This Year... Performance Improvement Remains a 'Challenge'

Rose to 2nd Largest Shareholder Last Year
Strengthening Control Through Additional Purchases
Department Store Business Slumps
Test Bed to Prove Management Capability

Kim Dong-seon, Executive Vice President and Head of Strategy at Hanwha Galleria and the third son of Kim Seung-yeon, Chairman of Hanwha Group, has been increasing his control over the distribution business by purchasing nearly 80,000 shares of the company this month alone. Since last year, Kim has steadily acquired Hanwha Galleria shares, rising to become the second-largest shareholder, and has continued his aggressive stake expansion this year. Industry insiders interpret Kim's actions as a move to strengthen responsible management, with keen interest in whether he can improve the department store business's poor performance.

According to the electronic disclosure system on the 16th, Hanwha Galleria announced on the 12th that Kim purchased 28,000 shares of Hanwha Galleria on the market. Kim acquired the shares in four separate transactions on that day, with an average purchase price of 1,426 KRW per share, totaling 39,935,000 KRW. As a result, Kim's holdings increased from 3,143,860 shares to 3,171,860 shares, and his stake rose from 1.60% to 1.61%.

Kim had also purchased 50,000 shares of Hanwha Galleria on the market earlier on the 3rd. Including this recent purchase, he has acquired shares twice this month.

Previously, Kim first bought 50,000 shares of Hanwha Galleria in April last year, about a month after Hanwha Galleria was newly listed following a spin-off from Hanwha Solutions. Since then, he has steadily increased his stake, becoming the company's second-largest shareholder. The largest shareholder of Hanwha Galleria is Hanwha, the Hanwha Group holding company, with 36.15% ownership.

Kim oversees the group's new distribution business strategies based on Hanwha Galleria and Hanwha Hotels & Resorts. He has focused on discovering new businesses, including introducing the American burger franchise 'Five Guys' to Korea. Recently, he has also been expanding his scope by concurrently serving as Executive Vice President and Head of Overseas Business at Hanwha's construction division.

Although Kim's internal control has increased, the department store business's declining sales have led industry observers to question his management capabilities. Galleria Department Store, operated by Hanwha Galleria, saw sales at all its stores decline last year. This contrasted sharply with competitors such as Shinsegae Gangnam and Lotte Main stores, which set new sales records last year.

According to industry sources, the Galleria Main Store's sales last year were preliminarily estimated at 1.1406 trillion KRW, down 7.0% from the previous year. The Daejeon Seo-gu Timeworld Store's sales also dropped 8.1% to 676.6 billion KRW. Additionally, all other nationwide stores, including Gwanggyo (602.9 billion KRW), Cheonan Center City (338.5 billion KRW), and Jinju (150.7 billion KRW), experienced sales declines compared to the previous year.

Therefore, recovering the department store business's performance is expected to be Kim's biggest challenge this year. However, with high inflation continuing this year following last year, the consumer downturn is expected to persist, making the outlook for performance recovery uncertain.

Exterior view of Galleria Department Store Luxury Hall in Gangnam-gu, Seoul.
Photo by Asia Economy DB

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