Shinsegae Duty Free, Busan Branch to Close on 24th... "Focusing on Incheon Airport and Main Store Capabilities"

Closure Scheduled as Planned Once Consultation with Customs Concludes
Sales in Busan Area Plunge 60% Due to Poor Business Conditions

Shinsegae Duty Free Busan Branch will close on the 24th of this month.

According to Shinsegae DF, which operates Shinsegae Duty Free, a notice was sent to the tenant brands on the 9th informing them that operations will end on the 24th. Currently, they are in discussions with customs to return the license, and plan to submit related documents this week. A Shinsegae Duty Free official explained, "Once the procedure to return the license is completed through consultation, the closure will proceed as scheduled."

Liquor store at Incheon International Airport Terminal 2 operated by Shinsegae Duty Free. Provided by Shinsegae Duty Free.

The license for Shinsegae Busan Branch was valid until 2026. However, due to the decline in Chinese group tourists after COVID-19 and the decrease in both domestic and foreign customers purchasing duty-free goods caused by the high exchange rate, the duty-free business conditions worsened, leading to the decision to return the license. As more brands vacated their spaces in the duty-free store, Shinsegae Duty Free reduced its operating area by 25% in November last year. Entering emergency management, Shinsegae DF also conducted voluntary retirement. Due to a surge in voluntary retirement applicants, weekend operations were suspended starting from the 21st of last month.

In fact, according to the Korea Duty Free Association, sales at duty-free stores in the Busan area have significantly decreased. In November last year, sales at Busan area duty-free stores were about 12.8 billion KRW, a roughly 60% drop compared to the 32.7 billion KRW in November 2023. Although the number of customers increased from 57,000 to 64,000, the average spending per customer dropped sharply as consumers purchasing high-priced products disappeared. Especially, Shinsegae Duty Free, located in the Centum City Mall in Busan, is estimated to have experienced a larger decline in sales.

Shinsegae Duty Free plans to focus its capabilities on operating the Incheon Airport and the main store in Myeongdong, Seoul. Shinsegae Duty Free has operated three locations: the downtown Seoul duty-free store, Incheon Airport branch, and Busan branch.

Recently, Shinsegae Duty Free renewed and reopened the watch and jewelry zone at the Myeongdong main store to attract individual tourists. Last month, it signed a strategic business agreement with Marriott International, a global hotel chain, for the first time in the industry. Marriott has about 200 million members worldwide and partnerships with over 40 airlines globally, which is expected to attract a broad customer base. On the 10th, the Hermes store at Incheon Airport Terminal 2, which had been operating as a temporary store, will officially open. The store is located between gates 250 and 251.

The Service Union of the Korean Confederation of Trade Unions held a press conference on the 7th in front of Shinsegae Department Store in Jung-gu, Seoul, demanding employment responsibility for subcontracted workers in relation to the closure of Shinsegae Duty Free Busan branch. Photo by Jo Yong-jun

Meanwhile, the Department Store Duty Free Sales Service Labor Union is urging Shinsegae Duty Free to take employment responsibility. The union has about 50 members, mostly workers selling cosmetics brands. The union stated, "While Shinsegae Duty Free implemented voluntary retirement for directly employed staff, it only said that nothing was decided for subcontracted workers," and demanded, "Take full employment responsibility for subcontracted workers."

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