[Asia Economy Reporter Jo In-kyung] Daegu Department Store's main branch, a regional traditional department store with 77 years of history, will cease operations.
Daegu Department Store announced on the 30th that due to deteriorating business conditions and continued deficits, the main branch in Dongseong-ro, Jung-gu, will temporarily close starting July 1.
A department store official stated, "As the external environment worsened, the main branch faced requests for brand withdrawal, demands for margin reductions, burdens of promotional staff labor costs, and expenses for store interior renovations, all exceeding what the store could handle. A comprehensive review is necessary to improve profitability."
Daegu Department Store began in 1944 when founder Gu Bon-heung established 'Daegu Sanghoe' around the old Dongin Hotel area in Jongno, Daegu. In 1969, a large 10-story department store was opened at the current Dongseong-ro main branch site, followed by a public offering in 1988 and the opening of Daegu Department Store Plaza (Daebaek Plaza) in 1993.
However, with the successive openings of Lotte Department Store Daegu branch in 2003, Hyundai Department Store Daegu branch in 2011, and Daegu Shinsegae in 2016, sales sharply declined, and the store underwent restructuring due to worsening management. In April 2017, the Daebaek Outlet Dongdaegu branch was opened but closed after just 17 months. Furthermore, last year, the store suffered a direct hit from COVID-19, resulting in an operating loss of 17.5 billion KRW.
The department store is currently considering reopening through additional capital investment, operating as an outlet, or completely leasing the space with a change of business type. The department store's position is that rumors of a sale, raised by some, have not been considered.
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