Retail in Asia

Headline

Seoul to issue four more duty-free licenses: possible reprieve for Lotte and WalkerHill?

Korea Customs Service today announced it will grant four new downtown duty free licences in Seoul to cater for booming tourism demand, notably from China.

Three will be granted to major retailers and one to a small & medium enterprise (SME).

Observers believe that the decision could mean dramatic reprieves for WalkerHill Duty Free and Lotte Duty Free’s acclaimed Lotte World Tower store. Both missed out on licence renewals last year (to Shinsegae Duty Free and Doosan Group, respectively), spurring huge controversy over job losses and the seemingly illogical disbanding of highly successful businesses. Walkerhill is due to close mid-May with Lotte World Tower Duty Free shutting by the end of June.

Commenting on today’s decision, Regina Hahm, Equity Analyst (Cosmetics, Hotel & Leisure, Fashion) for Mirae Asset Daewoo, told The Moodie Report: “The market expects the three most likely players to be Lotte World Tower and WalkerHill, and either Hyundai Department Store or E-Land. Lotte World Tower must be revived – since the quality of its infrastructure is the best in Korea and it has the best merchandising capability in Asia.”

One of Korea’s most experienced duty free retailers, speaking on the basis of anonymity, concurred with that view, saying: “Absolutely [the licences will be reprieved]. The Lotte World Tower store is too big and too important to delete from the market. WalkerHill, too will revive.”