One in 10 Cosmetic Stores in Myeongdong Closed... Dermatology and Plastic Surgery Clinics Unaffected by Recession

Cushman & Wakefield Announces '2020 Q2 Retail Investment Report'

On June 2nd, rental notices were posted throughout the streets of Myeongdong, Seoul, creating a quiet atmosphere. Photo by Moon Honam munonam@

[Asia Economy Reporter Cha Min-young] In the first half of this year, the Myeongdong area suffered the most damage among the six major street commercial districts in Korea due to the novel coronavirus disease (COVID-19) pandemic. Areas with a high dependence on foreign tourists experienced a greater impact from the decrease in foot traffic.

According to Cushman & Wakefield's "2020 Q2 Retail Investment Report" released on the 21st, among the six major street commercial districts in the first half of this year, the vacancy rate on Myeongdong's main street rose by 6.8 percentage points from the previous year to 12.8%, marking the largest increase. As of May, about 10% of cosmetic stores, the most leased business type in Myeongdong, were temporarily closed. When including the side streets, the closure or shutdown rate of cosmetic stores is expected to exceed this figure. Hongdae, Garosu-gil, and Itaewon also saw vacancy rates increase to 11.0%, 12.6%, and 9.5%, respectively, compared to the previous year.

In contrast, Gangnam areas such as Cheongdam, Gangnam, and Garosu-gil maintained a vacancy rate of 4.6%, similar to the same period last year. This is because the main industries in Gangnam?skin care, dermatology, and plastic surgery?continued to grow, although the growth rate slowed somewhat in the first half of the year. The number of related stores actually increased from 200 at the end of June last year to 204 this year, an increase of 4 stores. Domestic demand filled the gap left by the absence of foreign tourists, who had previously driven industry growth.

It is particularly analyzed that the number of people receiving plastic surgery procedures increased as more time was spent at home. According to Hana Financial Management Research Institute's "Sales Analysis by Industry Due to COVID-19," plastic surgery clinics' sales in the first quarter of this year increased by about 4% compared to the same period last year, placing them among the top 10 industries with sales growth.

The report noted, "With the government's emergency disaster relief funds being distributed, some retail stores in street commercial districts are showing signs of recovery in sales." However, it pointed out, "As the COVID-19 situation prolongs and the sales gap between online and offline retailers accelerates, it is expected to take time for retail stores in street commercial districts to recover to their average sales levels."