Hyundai Department Store Pangyo Branch Achieves 'Annual Sales of 1 Trillion KRW'... 'Hermes' Also Opens Store

Annual Sales Reach 1 Trillion KRW in 5 Years and 4 Months Since Opening
Growth Overcoming COVID-19 Challenges
Jung Ji-sun, Chairman of Hyundai Department Store Group: "Thanks to Employees' Hard Work"
Attracting Famous Luxury Brands in the Second Half of the Year

[Asia Economy Reporter Cha Min-young] Hyundai Department Store Pangyo Branch has surpassed annual sales of 1 trillion won just 5 years and 4 months after its opening. It has earned the title of ‘the fastest department store in Korea to join the 1 trillion won club.’ This achievement is considered even more significant as it was accomplished despite the adverse conditions of the prolonged COVID-19 pandemic and the offline store slump this year. The plan is to transform into the top department store through a major renewal in the second half of this year by attracting luxury brands such as Herm?s.

Hyundai Department Store announced on the 11th that the Pangyo Branch recorded annual sales of 1.0074 trillion won last year. This represents a 9.4% increase from the 920 billion won sales in 2019. This achievement was made 5 years and 4 months after its opening on August 21, 2015. It set a new record for the shortest period among domestic department stores and is also significant as the first ‘1 trillion won department store’ outside Seoul and Busan.

Given the challenging offline business environment due to COVID-19, the internal atmosphere is also positive. In fact, among Hyundai Department Store’s 15 branches, only Pangyo and Apgujeong Main Branch saw sales increase in 2020 compared to the previous year. Regarding this, Chung Ji-sun, Chairman of Hyundai Department Store Group, recently encouraged employees by saying, “It is very meaningful that Pangyo Branch achieved 1 trillion won in sales despite the difficult business environment caused by the prolonged COVID-19,” and expressed gratitude for their hard work.

The Core Driver of Performance Growth is MD Power

The background of last year’s performance growth includes ▲merchandise planning (MD) competitiveness ▲new shopping and cultural experiences ▲increase in core customers with purchasing power and metropolitan area customers ▲efforts for mutual growth with the local commercial district. In particular, the MD competitiveness, considered the highest level among domestic department stores, was effective. Since its opening in 2015, Pangyo Branch has successively introduced global luxury brands such as Louis Vuitton, Cartier, Tiffany, Bulgari, and Piaget, establishing a luxury lineup comparable to department stores in Gangnam, Seoul. In fact, it achieved sales of 300 billion won in just four months of operation in its first year and has maintained an annual growth rate of 5-10% since then.

Based on the largest sales area in the metropolitan area (92,578㎡ / 28,005 pyeong), Pangyo Branch has also built a food hall and various killer contents. The largest food hall in Korea, twice the size of a soccer field (13,860㎡ / 4,192 pyeong), houses over 130 domestic and international popular restaurants and food & beverage (F&B) stores, the largest scale in the department store industry. Last year alone, 26 million customers visited, exceeding the average number of visitors to Hyundai Department Store’s 15 branches by about 2.5 times. To maximize customer experience, the Hyundai Children’s Book Museum also played a key role. The museum, which could accommodate 40-50 clothing stores, is filled with two exhibition halls and 6,500 picture books. Since its opening in 2015, about 750,000 people have visited. In October last year, the ‘Art Museum,’ which showcased works by famous artists such as Yayoi Kusama and Kim Whanki, attracted about 100,000 visitors in one month.

Geographical advantages also played a role. The increase in core customers with purchasing power in Bundang and Pangyo, Gyeonggi Province, as well as the growing proportion of metropolitan area customers, is positive. In fact, the number of VIP customers at Pangyo Branch has increased to a level similar to Hyundai Department Store’s Apgujeong Main Branch and Trade Center Branch. The number of expedition customers visiting Pangyo Branch from metropolitan areas such as Yongin, Anyang, Suwon (Gwanggyo), and Yeoju, which are more than 10 km away, is also increasing. The sales proportion from metropolitan areas rose from 38.6% in the opening year 2015 to 55.3% last year.

Efforts for mutual growth linked with the local commercial district also contributed to Pangyo Branch’s growth. To create a virtuous cycle structure that expands the entire commercial district pie and revitalizes the local economy, Pangyo Branch signed a business agreement for ‘local economic revitalization’ with Seongnam City in 2019. Accordingly, Pangyo Branch has hosted startups and designer brands based in Seongnam City in the form of pop-up stores to help them develop sales channels.

Hyundai Department Store Pangyo Branch Attracts Luxury Brands such as ‘Herm?s’

Hyundai Department Store plans to leverage this milestone of surpassing 1 trillion won in sales to develop Pangyo Branch into ‘Korea’s representative department store.’ To this end, it plans to attract additional luxury brands and renew all floors, while accelerating efforts to secure potential customers through the development of surrounding commercial districts.

They are strengthening the luxury lineup. From the second half of this year, about 10 famous brands, including French jewelry brand Boucheron and British fashion brand Burberry, will be newly introduced at Pangyo Branch, and efforts to attract core luxury brands will continue. A Hyundai Department Store official said, “Regarding Herm?s, known as one of the three major luxury brands, we are positively considering starting construction as early as the second half of this year, aiming for an opening next year,” and added, “We are also in talks to bring in luxury watch brand Rolex.”

At the same time, renewal work for all floors of Pangyo Branch will be carried out step by step. First, within this year, they plan to open a ‘VIP lounge exclusively for customers in their 20s and 30s’ targeting young wealthy customers and a luxury men’s specialty store. Additionally, from next year, they plan to renovate the food hall on basement level 1 and the cosmetics store on the first floor, and also create various specialty stores such as a luxury shoe specialty store (Shoe Library) and a children’s specialty store (Kids Park).

Furthermore, the accelerated development of the commercial district around Pangyo Branch is expected to be a positive factor in the future. The second Techno Valley, located within 3 km straight distance from Pangyo Branch, will see companies moving in in earnest this year, and the third Techno Valley is currently under construction with completion targeted for next year. New apartment complexes with 5,700 households are also scheduled to be occupied nearby.

Kim Hyung-jong, President of Hyundai Department Store, said, “Along with the ultra-luxury strategy of attracting core luxury brands, we plan to contribute to revitalizing the local economy and develop Pangyo Branch into Korea’s number one ‘shopping landmark’ beyond the metropolitan area,” adding, “Other department stores such as Apgujeong Main Branch and Trade Center Branch will also be nurtured into ‘mega life platforms’ that provide differentiated value to customers’ lives.”