[Report] Youthful Cheongdam... Only Luxury Brands Survive

Weekday Wait Times at Chanel Stores Drop in 2030 Foot Traffic
Vacancy Rates Fall, Only One in Seoul's Main Commercial Areas
Three New Stores Open This Year, Bringing Vibrancy

[Asia Economy Reporter Lim Hye-seon] "The flow of 20s and 30s visiting luxury brand stores never stops. Thanks to this, the luxury street in Cheongdam-dong is coming back to life."

The approximately 1 km "luxury street" from Galleria Luxury Hall in Apgujeong-dong, Seoul to Cheongdam Intersection is being revived. The street, which had been quiet for a while, has become bustling again. This phenomenon emerged as consumption on luxury goods concentrated after COVID-19.

Chanel Flagship Store Also Has Weekday Waiting

On the 11th, the luxury street in Cheongdam-dong was crowded with people. At the Chanel flagship store, dozens of young customers were waiting in line for their turn. A woman in her 20s waiting to enter the Chanel store said, "I came after hearing that new products have arrived," adding, "Until early last year, I could enter without waiting, but these days, whether at department stores or flagship stores, you have to wait before entering even on weekdays." Nearby Louis Vuitton and Dior stores did not have waiting customers but had a considerable number of customers browsing products.

A luxury store employee said, "Usually, VIPs or middle-aged people living nearby visited the Cheongdam-dong stores, but recently many people in their 20s and 30s have been coming," adding, "Sales and the number of visitors have nearly doubled compared to previous years."

Only Luxury Brands Survived

On the luxury street, overseas contemporary brands and luxury brand stores coexisted, but recently, brands that could not endure rent and labor costs have left, leaving only luxury stores. Most of the newly opening brands are luxury brands. Construction work to establish new locations was actively underway in various places. Dolce & Gabbana opened in February, and this year Saint Laurent and Van Cleef & Arpels will open.

Led by Chanel, Louis Vuitton, Cartier, Gucci, and others, Cheongdam-dong is reemerging as a battleground for world-renowned designers. Overseas luxury companies are investing again in the Korean market, where sales have increased after the COVID-19 crisis, gathering in Cheongdam-dong.

The Only Seoul Commercial Area with Vacancy Rate Decline

The Cheongdam-dong commercial area is the only one among six major commercial areas?Myeongdong, Garosu-gil, Hongdae, Itaewon, Gangnam Station, and Cheongdam-dong?where the vacancy rate has decreased. According to Cushman & Wakefield Korea, due to the impact of COVID-19, the average vacancy rate of the six major commercial areas in Seoul rose by 4.8 percentage points in the second half of last year compared to the first half. Among the six areas, Cheongdam's vacancy rate only fell by 0.4 percentage points. The suppressed desire to consume is continuing with 'flex consumption' and 'influencer culture' centered on the MZ generation. According to Seoul City, bag sales in the Cheongdam area increased by 120% year-on-year last year. Sales in the watch and jewelry sector also rose by 110%.

A representative of a real estate agency in Cheongdam-dong explained, "In fact, Cheongdam-dong currently has no vacancies," adding, "Buildings that are still vacant are because landlords are selectively waiting for large corporations and luxury brands."

The nearby Galleria Department Store luxury hall was also crowded with people despite it being a weekday afternoon. The Chanel waiting list exceeded 200 people, and Hermes had more than 50 people waiting. A Chanel store employee even informed people, "If the waiting list exceeds 200, there is a high possibility that you will not be able to enter the store until closing time today."