Attention on The Hyundai Seoul Louis Vuitton Store Opening
Arnaud Chairman's Visit Brings Out Top Retail Executives
Boosting Competition to Attract Major Luxury Brands
Bernard Arnault, Chairman and CEO of LVMH (Louis Vuitton Mo?t Hennessy) Group, who visited Korea, included The Hyundai Seoul among the major domestic department stores he visited, drawing attention from the industry. The Hyundai Seoul is the only department store among those Arnault toured over two days after his arrival in Korea where Louis Vuitton is not yet present. In a situation where major global luxury brands, led by "Erusha" (Herm?s, Louis Vuitton, Chanel), are restricting the number of stores by region and are cautious about additional openings, Arnault's visit to The Hyundai Seoul is attracting attention as a potential turning point.
Bernard Arnault, Chairman and CEO of LVMH Group, is entering The Hyundai Seoul in Yeongdeungpo-gu, Seoul, on the afternoon of the 21st. Kim Hyung-jong, CEO of Hyundai Department Store, and others accompanied him on this occasion. [Photo by Reader].
According to the distribution industry on the 22nd, Arnault arrived at The Hyundai Seoul in Yeongdeungpo-gu, Seoul, at around 5:10 p.m. the previous day and toured the site for about 10 minutes. He visited the LVMH group brand stores Dior, Bulgari, and Tiffany & Co. on the first floor of The Hyundai Seoul. He was accompanied by his daughter Delphine Arnault at the Dior store and had a conversation while sitting on chairs with his son Alexandre Arnault at the Tiffany store. Earlier in the morning, Chung Ji-sun, Chairman of Hyundai Department Store Group, who hosted Arnault at Hyundai Department Store Pangyo branch, did not join the afternoon schedule as it was the 22nd anniversary of the late Chung Ju-yung, Honorary Chairman of Hyundai Group. Kim Hyung-jong, CEO of Hyundai Department Store, and others accompanied Arnault.
Before Arnault's visit that day, the biggest interest was whether and when Louis Vuitton would open a store at The Hyundai Seoul. The Hyundai Seoul, which opened in February 2021, recorded sales of 977 billion KRW in its second year (February 23, 2022 ? February 22, 2023), and is expected to achieve annual sales of 1 trillion KRW in the shortest period in the department store industry this year. This performance was achieved without representative luxury brands such as Erusha, and the industry expects that additional entry of major luxury brands will accelerate sales growth. Among Erusha, Louis Vuitton has been in discussions about opening a store at The Hyundai Seoul since its opening, and since the Louis Vuitton store at Hyundai Department Store Mokdong branch closed last August, it was expected to be the first brand to announce its entry. The industry sees a high possibility of Louis Vuitton opening a store at The Hyundai Seoul within this year.
This is why Arnault's visit that day attracted particular attention. After Arnault left, LVMH employees, Louis Vuitton Korea officials, and Hyundai Department Store officials discussed while checking the first-floor store guide in front of the LVMH group brand Celine store, scheduled to open on the 30th, toured The Hyundai Seoul for about 20 more minutes, and then left. A Hyundai Department Store official said, "There is no confirmed fact about Louis Vuitton's entry," but added, "Discussions about entry are ongoing."
Lotte Chairman Shin Dong-bin is seen conversing with Bernard Arnault, Chairman of LVMH Group, on the afternoon of the 20th at Lotte Avenuel in Jamsil, Songpa-gu, Seoul. [Photo by Reader].
Meanwhile, after arriving in Korea on the 20th, Arnault visited Lotte Department Store Main Branch and Jamsil Branch, duty-free shops, Shinsegae Department Store Main Branch and duty-free shops, Dior Seongsu, and Galleria Department Store luxury hall, and the next day visited Hyundai Department Store Pangyo Branch, Shinsegae Department Store Gangnam Branch, and The Hyundai Seoul to check LVMH group brand stores. He also made a private visit to the Leeum Museum of Art. At each visit, Shin Dong-bin, Chairman of Lotte, Chung Ji-sun, Chairman of Hyundai Department Store Group, Lee Boo-jin, President of Hotel Shilla, and others including Kim Sang-hyun, Vice Chairman and CEO of Lotte Distribution HQ, Jung Joon-ho, CEO of Lotte Department Store, Son Young-sik, CEO of Shinsegae Department Store, Kim Hyung-jong, CEO of Hyundai Department Store, and Kim Eun-soo, CEO of Galleria, were present to welcome Arnault.
Despite Arnault's brief visit, the heads of the distribution industry gathered to provide protocol because LVMH Group owns a significant number of major global luxury brands. Arnault is the head of LVMH, which owns many luxury brands including Louis Vuitton, Dior, Fendi, Celine, Tiffany & Co., and Mo?t & Chandon, and is also called the "Luxury President." At the end of last year, Bloomberg's billionaire index ranked him first in the world with a net worth of $170.8 billion (about 223 trillion KRW).
Since COVID-19, domestic demand for luxury goods has increased significantly, making the acquisition of major luxury brands a greater competitive advantage for each channel. Due to the major luxury brands' policy of limiting the number of stores by region, competition among department stores to attract luxury brands is fierce. Additionally, duty-free shops are gradually withdrawing from downtown locations and expanding airport duty-free shops, led by Louis Vuitton. The calculations of the distribution industry welcoming Arnault vary. The fact that owners and CEOs of each company took the lead in welcoming Arnault is analyzed as an effort to support the expansion of LVMH group brands in department stores and airport duty-free shops, as well as maintaining and additionally attracting downtown duty-free shops.
This visit by Arnault is the first in 3 years and 5 months since 2019. From 2016 until before the spread of COVID-19 in 2019, he regularly visited Korea every year and met with major CEOs in the distribution industry. However, this visit is interpreted as a visit with business plans in mind, including attracting new stores and additional investments in domestic department stores and duty-free shops, as the domestic luxury market has grown sharply during the COVID-19 period. According to Morgan Stanley, Korean luxury consumption last year was $16.8 billion (about 22 trillion KRW), a 24% increase from the previous year. Per capita purchase amount was $325 (about 420,000 KRW), ranking first in the world, surpassing the U.S. and China.
Hyun Ji-sun, Chairman of Hyundai Department Store Group, is having a conversation with Bernard Arnault, Chairman of LVMH Group, at Hyundai Department Store Pangyo Branch in Seongnam-si, Gyeonggi-do on the 21st.
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