Korea Downtown duty-free operators are preparing to open boutiques for in-demand luxury brands in the hope of restoring sales that have fallen with a drop in the number of Chinese tourists visiting Korea.
Shinsegae DF, which opened up Cartier and Fendi stores in August 2017, is preparing to open stores for Louis Vuitton and Dior later this month.
SEE ALSO : Shinsegae to rev up online, overseas expansion
HDC Shilla Duty Free is also preparing a Louis Vuitton boutique at its IPark branch, following a deal last year to bring in some 20 brands from the luxury group LVMH.
Hanwha Galleria opened German luxury watch Nomos and TOD’s last month.
Doota will also open IWC on Sep 15, and la prairie at the end of this month.
Luxury brands such as Louis Vuitton, Chanel and Hermes are major attractions for high duty-free spenders.
As the industry struggles to regain sales amid the falling number of Chinese group tourists, the introduction of such luxury boutiques may provide a breakthrough by bringing in more high-spending individual tourists.
“We are targeting our marketing at individual travelers in the case of our luxury brands,” said an official with Shinsegae DF.
Currently, new duty free shops are struggling from deficit due to serious decline in Chinese tourists.
SEE ALSO : No rent relief for travel retailers at Incheon International
Shinsedae DF posted an operating loss of 60 billion won in the first half of the year. Hanwha Galleria and Doota even saw an operation loss of 270 billion won and 170 billion won respectively.
Lee Ji-yeong, an analyst with NH Investment and Securities, estimated that daily sales at Shinsegae DF may rise to up to 4 billion won (US$3.5 million) with a boost from luxury brands similar to sales that the company saw in February before intergovernmental tensions between Korea and China caused a sharp drop in Chinese group tourists to Korea.
(Source: Korea Herald)