MZ Drives Strong Performance with Luxury Brand Attraction… The Hyundai Seoul Aims for '1 Trillion Won Sales Club'

Dior Store Opening Next Month
Louis Vuitton Negotiates Entry Next Year
Direct Investment and Sales Expansion Efforts Underway

The Hyundai Seoul, 'Sounds Forest'.

[Asia Economy Reporter Kim Yuri] The Hyundai Seoul, which has been continuing strong performance backed by the MZ generation (Millennials + Generation Z), is aiming for a performance jump by attracting major luxury brands. To strengthen its existing strength of targeting MZ generation content, it is also putting effort into direct investment, aiming to get closer to joining the 1 trillion KRW sales club in the shortest period among domestic department stores.

According to the distribution industry on the 14th, The Hyundai Seoul plans to open a French luxury brand Dior store next month and is currently negotiating to open a Louis Vuitton store, one of the "?r·Lu·Sha" (Herm?s, Louis Vuitton, Chanel) brands, next year. The Hyundai Seoul’s first floor "Exclusive Level" houses luxury fashion brands such as Prada, Gucci, Bottega Veneta, Fendi, Saint Laurent, Valentino, Balenciaga, Burberry, Moncler, and Thom Browne, as well as luxury jewelry brands like Bulgari, Tiffany, Boucheron, and luxury watch brands including Jaeger-LeCoultre, Omega, and IWC. The Hyundai Seoul has placed a waterfall garden and popup and exhibition spaces on the same floor so that customers can naturally immerse themselves in the space, allowing them to experience not only high-end brands but also various contents such as art pieces.

However, compared to the MZ Zone (Creative Ground) on basement level 2, which is lined with designer brands that attract the attention of the 20s and 30s age group in the early days of opening, the attention to this floor was relatively low. Even though The Hyundai Seoul achieved sales of 800 billion KRW, the highest level for a domestic department store within one year of opening in February, the buying power of the MZ generation, based on unique MD competitiveness that was hard to find in other department stores, played a role. During this period, the sales proportion of the 20s and 30s age group exceeded 50% of total sales. According to the financial investment industry, The Hyundai Seoul exceeded its existing sales target by 30% within one year of opening and surpassed the break-even point (BEP) in March.

Entering its second year, The Hyundai Seoul plans to expand sales by adding more luxury stores in addition to the purchasing power of the MZ generation. Major luxury stores generally decide to open after confirming the sales situation of the newly opened department store in the first year. Herm?s, which will open in Hyundai Department Store Pangyo branch in October, also decided to open after confirming the strong performance of the Pangyo branch. A distribution industry official said, "Discussions about Louis Vuitton’s opening at The Hyundai Seoul started early on, but due to the nature of the luxury industry, it takes time to finalize the opening as they comprehensively consider the department store’s performance, reputation, and whether the brand is already present in the area," adding, "Since there have been long discussions, it is expected to open around next year."

Hyundai Department Store is also strengthening its investment in startups to enhance customized content for MZ generation customers. Last year, Hyundai Department Store invested 3 billion KRW in the lifestyle store "Nice Weather," which has a convenience store concept, successfully expanding its MZ generation customer base. Recently, it invested 2 billion KRW in the natural cowhide material customizing accessory startup "Smith & Leather." In its second year, The Hyundai Seoul is targeting sales of 920 billion KRW, about 20% higher than the previous year. Based on this, it is expected to easily join the 1 trillion KRW sales club in the shortest period among domestic department stores next year.