FG Korea Achieved 10.4 Billion KRW Sales Last Year
Hanwha Galleria Sales Share Also Expanded by 2.2%
FG Korea, a subsidiary of Hanwha Galleria that operates the American hamburger brand Five Guys, recorded sales of 10.4 billion KRW last year. Given that each store generates over 1 billion KRW in monthly sales, it is considered to have successfully established itself in the market. Five Guys is a business led by Kim Dong-seon, Vice President and Head of Strategy at Hanwha Galleria, who is the third son of Hanwha Group Chairman Kim Seung-yeon.
According to the Financial Supervisory Service's electronic disclosure system on the 27th, Hanwha Galleria announced in its business report this year that it recorded sales of 10.42885 billion KRW in the food and beverage sector. Sales in the third quarter of last year were 3.59221 billion KRW.
Citizens are lining up to enter the second branch of the hamburger brand 'Five Guys,' which opened at The Hyundai Seoul in Yeongdeungpo-gu, Seoul. [Image source=Yonhap News]
A citizen is eating a hamburger at the second store of the hamburger brand 'Five Guys,' which opened at The Hyundai Seoul in Yeongdeungpo-gu, Seoul. [Image source=Yonhap News]
Currently, Hanwha Galleria's food and beverage segment is managed by subsidiaries such as FG Korea, which operates Five Guys, and Vino Galleria, a wine retailer. Since Vino Galleria's sales are still minimal, most of the food and beverage sales come from Five Guys.
Last year's sales by FG Korea are considered encouraging, given that they were generated from only two stores. Five Guys currently operates three stores. Among them, the third store located on the first floor of Sweet Park at Shinsegae Department Store Gangnam Branch opened last month and was not reflected in last year's business report. Five Guys opened its first store on Gangnam-daero, Seoul, in June last year and its second store at The Hyundai Seoul in Yeouido, Seoul, in October.
The operating periods for the two stores are seven months for the first store and three months for the second. Considering this, the monthly sales per store are estimated to exceed 1 billion KRW. With FG Korea's sales surging, the food and beverage segment, which accounted for 1.2% of Hanwha Galleria's sales in the third quarter of last year, expanded to 2.2% last year.
FG Korea's performance was also recognized by the global Five Guys. From the 20th to the 23rd of last month, FG Korea swept two out of five franchise award categories at the 'Five Guys Conference' held in Las Vegas, USA, achieving the most awards. The Five Guys Conference is a global event held every two years, where the US headquarters invites global operators to share business achievements. According to the headquarters' data, among the 1,858 stores worldwide, three of the top five weekly average sales stores were located in Korea.
Five Guys is a brand that started in Virginia, USA, in 1986 and is considered one of the three major American burgers alongside Shake Shack and In-N-Out. It operates in 23 countries including the UK, France, and Germany. Vice President Kim led the acquisition in Korea.
Kim Dong-seon, Vice President and Head of Strategy at Hanwha Galleria, ordering a hamburger at the second branch of 'Five Guys,' which opened last year. [Photo by Yonhap News]
Five Guys is regarded as Vice President Kim's first achievement in the distribution sector. As the youngest of the three Hanwha Group brothers to join management, he is actively promoting new businesses including Five Guys. Five Guys plans to open its fourth store next month and add two more stores in the second half of this year. Hanwha Galleria stated in its business report that it will invest 3.5 billion KRW in store openings in the first half of this year. It also aims to operate more than 15 stores within the next five years, so one or two additional openings are expected in the second half of the year.
Kim Young-hoon, CEO of Hanwha Galleria, said in his greeting at the regular shareholders' meeting held at Hanwha Financial Center 63 in Yeouido, Seoul, this morning, "With the successful establishment of Five Guys, a global food and beverage business newly started and settled since last year, we will grow into a differentiated franchise specialist company," adding, "We plan to steadily pursue profit improvement through business expansion and operational efficiency."
Hanwha Galleria recorded sales of 434.5 billion KRW and operating profit of 9.8 billion KRW last year, including its core department store business. The net loss was 30.1 billion KRW. CEO Kim explained, "This was due to one-time costs such as various fees incurred during the spin-off process and withdrawal from inefficient businesses."
He continued, "Our economy is expected to face a very difficult year with limited growth predicted amid rising global inflationary pressures and uncertainty over interest rates," but added, "We will achieve qualitative growth through efforts such as pioneering new markets and strengthening fundamentals, and enhance competitiveness in the distribution industry."
Hanwha Galleria was newly listed last March after being spun off from Hanwha Solutions. This shareholders' meeting was the first held after the spin-off, and Kim, the company's second-largest shareholder and head of strategy, did not attend. Kim has been continuously purchasing shares of Hanwha Galleria since the spin-off last year. As of the 22nd, his stake in Hanwha Galleria was 1.89%.
Vice President Kim is also expanding business. Last month, Hanwha Galleria renamed The Tastable, a dining subsidiary of Hanwha Hotels & Resorts, to Hanwha Food Tech and announced plans to actively collaborate with Hanwha Robotics, Hanwha's robot-specialized affiliate, to implement food tech. Hanwha Food Tech acquired the US robot pizza brand 'Stellar Pizza' and is expanding its business in the dining sector.
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