[Report] Daejeon Branch Bustling on First Weekend After Reopening... Hyundai Department Store Aims for Turnaround in Second Half

Hyundai Outlet Daejeon Branch Reopens, Weekend Crowds
Enhanced Safety + Local Cooperation... Leading H2 Performance Improvement

"If you wait now, you will have to wait about 90 minutes until mealtime."

On the 18th, the 'Hyundai Premium Outlet Daejeon Branch,' which reopened, was crowded with visitors on its first weekend. The entrance to the parking lot was a challenge. The 1,500 parking spaces on the ground floor were fully occupied within about 30 minutes of opening, and the temporary parking lot set up by Hyundai Outlet Daejeon also quickly filled up. Visitors were seen looking for empty spots and parking in spots far away. At around 1 p.m., lunchtime, the restaurants on the 1st and 3rd floors were also very crowded. Waiting times ranged from at least 30 minutes to over 90 minutes. The cafes were also backed up, taking at least 20 minutes to receive a single Americano.

On the 18th, Hyundai Premium Outlet Daejeon in Yuseong-gu, Daejeon, was bustling with customers. Photo by Moon Hyewon

Reopening Crowds, Enhanced Safety + Local Coexistence

Hyundai Outlet Daejeon Branch resumed operations on the 12th after about nine months since the fire incident that occurred at the end of September last year. Considering that about 300 employees from tenant partner companies, contractors, and local small business owners had suffered difficulties due to the outlet's closure, safety measures and related facilities were established, and temporary building use permission was obtained to reopen.

The main focus before reopening was safety and local coexistence. Hyundai Outlet Daejeon installed 'wet sprinklers' filled with water in the pipes for immediate discharge upon fire detection and 'air suction-type detectors' that analyze air quality to detect fires throughout the underground parking lot. The insulation material in the underground parking lot is the highest grade of non-combustible insulation. The capacity of fire extinguishing water was also significantly increased. By the end of this year, flame detectors equipped with Internet of Things (IoT) functions that send alarms directly to workers' mobile phones upon fire detection will be installed. The underground parking lot is undergoing final environmental improvement work and is scheduled to open in September.

To revitalize the local commercial district, the 'Daejeon Happiness Market,' featuring 18 excellent local small businesses, was opened on the 1st floor agency hall upon reopening, which was also crowded that day. Major brand stores such as Nike, Gucci, and Prada also took more than an hour to enter, continuing the flow of shoppers.

Many visitors also came to enjoy leisure activities. With the reopening news, local families flocked, and the large carousel located in the center of the 1st floor was very popular. Adults were bright as they continuously captured children laughing and riding the amusement rides on their cameras. In the outdoor area overlooking Gapcheon Stream behind the outlet, large swings called 'Webnet Shade Nets' and fountains were set up as customer resting spots. A 'picnic set' rental service offering free rental of mats and parasols was also available. Customer Lee Jin-kyung (38, pseudonym), who visited with her kindergarten-aged child and pet dog from Seo-gu, Daejeon, said, "Since it was the first weekend after reopening, there were many events, and services allowing children and pets to enter together were well established, so I came. The children really enjoyed riding the carousel." She added, "There are not many large retail facilities like this in Daejeon, so as a Daejeon citizen, I am glad about the reopening."

On the 18th, the entrance of the Nike store at Hyundai Premium Outlet Daejeon in Yuseong-gu, Daejeon, is crowded with customers trying to enter. Photo by Moon Hyewon

Looking for a Turnaround in the Second Half

The suspension of operations at Hyundai Outlet Daejeon reduced the growth rate of existing Hyundai Department Store branches by 3 percentage points. Last year, related losses of about 25 billion KRW were recorded, and this year, losses are estimated to be between 10 billion and 15 billion KRW. Hyundai Department Store expects that this offset factor will turn into a positive and help improve performance in the second half of the year.

Due to the high performance last year causing a base effect, the dispersal of endemic (periodic infectious disease) consumption this year, and concerns about economic recession, the department store industry’s overall performance has been sluggish this year. Hyundai Department Store also saw its operating profit in the first quarter decrease by 7.4% to 95.2 billion KRW compared to the same period last year, despite maintaining a high growth trend during the COVID-19 'revenge consumption' period.

In the second half, in addition to the effect of Hyundai Outlet Daejeon, the expansion of foreign customer sales contribution centered on The Hyundai Seoul and Trade Center stores is expected to contribute to performance improvement. This year, Hyundai Department Store’s foreign customer sales ratio is around 2.5%, and since it has many stores preferred by foreigners, further increases are anticipated in the second half.

The rebound of duty-free shops due to increased foreign tourists and the normalization efforts of Zinus, whose supply chain has stabilized, are also expected to positively impact performance improvement in the second half. According to FnGuide, Hyundai Department Store’s consensus estimates for this year are sales of 5.245 trillion KRW and operating profit of 352.4 billion KRW, representing increases of 4.61% and 9.82%, respectively, compared to the previous year. Lee Jin-hyeop, a researcher at Hanwha Investment & Securities, said, "Since major stores are located on the ground floor of the outlet, most of the negative impact on overall performance caused by the first reopening on the 12th will be resolved," adding, "With this contribution to existing store growth, Hyundai Department Store is the most certain department store operator to rebound in the second half of this year."

Daejeon = Reporters Moon Hye-won, Kim Yu-ri