Hyundai Department Store, Renewal of Jungdong Branch... First Step in Strengthening Offline Platform Strategy (Comprehensive)

Starting with the Middle East Branch, 4 Branches to be Renewed This Year
200 Billion KRW Investment... Expected Improvement in Operating Profit

Hyundai Department Store Jungdong Branch is undergoing a major renewal for the first time in 20 years. This is the first step in strengthening the spatial competitiveness of the offline platform, a strategy outlined by Hyundai Department Store CEO Jeong Ji-young this year. Earlier, at last month's shareholders' meeting, CEO Jeong announced plans to invest around 200 billion KRW in key stores including Jungdong Branch to swiftly adapt to changes in the distribution environment and new lifestyles.

The Largest Renewal Since Opening... Over 100 Brands to Enter

Hyundai Department Store announced on the 8th that it will renew the Jungdong Branch in Bucheon, Gyeonggi Province, from basement level 1 to the 2nd floor of the main building and U-PLEX to introduce over 100 domestic and international fashion, beauty, and food brands. The renewed space covers 14,800㎡ (approximately 4,500 pyeong), more than twice the size of a soccer field. Following the recent renovation of the food hall earlier this month, Hyundai Department Store plans to solidify Jungdong Branch’s status as the representative department store in the western Gyeonggi commercial district by introducing overseas fashion and young contemporary brands.

Through this renewal, Jungdong Branch will unveil a 'Food Park' on the 1st floor of the main building, gathering domestic and international food and beverage (F&B) brands in one place, and open the largest luxury hall in the commercial district on the 1st and 2nd floors of the main building. From basement level 1 to the 2nd floor of U-PLEX, a trendy hall targeting the MZ generation (Millennials + Generation Z) will be introduced. Once completed, over 100 new brands in fashion, beauty, and food will be added.

First, after four months of renovation, the F&B specialty hall Food Park, covering 3,339㎡ (about 1,010 pyeong) on basement level 1, was launched on the 1st. It houses Incheon Bupyeong’s Japanese bakery 'Ekinomae', character macaron specialty store 'Robin Dessert Shop', Taiwanese frothy drink 'Drink Store', among others. All of these are the first department store branches for each F&B brand. Additionally, a total of 56 brands including famous domestic and international bakeries, desserts, and eateries have opened.

Ji-young, CEO of Hyundai Department Store, is giving a greeting speech at the 22nd regular shareholders' meeting held on the 26th at Woojin Building, Gangdong-gu, Seoul.
[Image source=Yonhap News]

First Stores of Luxury Brands like Gucci and Balenciaga

Hyundai Department Store explained that customer response to the Food Park after the renewal has been positive. From the 1st to the 7th, sales and customer numbers at Food Park increased by 51.3% and 45.7% respectively compared to the same period last year. In May, Jungdong Branch plans to open the third domestic store of the Italian grocerant brand 'EATALY', and in July, a premium supermarket selling top-quality fresh food and processed goods will be introduced.

The luxury hall on the 1st and 2nd floors of the main building will house overseas fashion and beauty brands. In July, luxury brands such as Gucci, Balenciaga, Ferragamo, and Moncler will open for the first time in the Bucheon area on the 1st floor. On the 2nd floor, global fashion brands including Herno, Comme des Gar?ons, Isabel Marant, and Marc Jacobs will open next month. Earlier on the 1st, a Beauty Park gathering 22 domestic and international cosmetics brands such as Jo Malone, Dior Beauty, and Sisley was unveiled on the 1st floor.

The trendy hall from basement level 1 to the 2nd floor of U-PLEX will be filled with young contemporary and emerging designer brands. On the 5th, casual wear brand 'Musinsa Standard' operated by Musinsa opened for the first time in the department store industry on the 2nd floor of U-PLEX. Emerging designer brand 'Matang Kim' and gym wear brand 'HDEX' will open sequentially on the 12th and 16th. In the second half of the year, brands targeting the MZ generation such as A.P.C., Maison Kitsun?, Beaker, and Casetify are expected to open in large numbers.

Hyundai Department Store’s major renewal of Jungdong Branch comes as the surrounding commercial district undergoes changes. Within a 10 km radius of Jungdong Branch, new town developments are planned in Incheon Geomdan, Gyeyang, Bucheon Daejang, Gwangmyeong, and Siheung, and the Sangdong Video Culture Complex with a media observatory, hotel, and e-sports stadium is also under development. Once these new towns and the video culture complex are completed, demand from the hinterland is expected to increase. Additionally, the Seoul Subway Line 7, which connects Jungdong Branch and Bucheon City Hall Station, is undergoing an extension project to Cheongna International City with a target opening in 2027, which is expected to increase visits from nearby customers.

Exterior view of Hyundai Department Store The Hyundai Seoul

Jungdong Branch Is Just the Beginning... Three More Stores to Be Renewed

Starting with Jungdong Branch, Hyundai Department Store plans to begin renewing major stores including The Hyundai Seoul, Pangyo Branch, and Hyundai Premium Outlet Gimpo Branch within the year. The planned investment amount is about 200 billion KRW. For each store, the company intends to establish content and operational strategies specialized for the local commercial district to strengthen their identity as 'local stores.'

In this process, many luxury stores are expected to open. Especially at The Hyundai Seoul, following the new entry of luxury brand Louis Vuitton in December last year, Italian padding brand 'Herno' plans to launch within this year. A Hyundai Department Store official said, "Although we cannot disclose details yet, several brand openings are scheduled, which will likely lead to changes in store composition and layout."

Hyundai Department Store’s large-scale store renewals are interpreted as a response to shrinking consumer sentiment due to the 'three highs'?high inflation, high exchange rates, and high interest rates?and the growing e-commerce market, which has made new store openings burdensome.

The renewal work is expected to help improve operating profits in the department store sector going forward. Last year, Hyundai Department Store strengthened MD (merchandise planning) for each store through an investment of 210 billion KRW, achieving total sales of 7.3429 trillion KRW and operating profit of 357.7 billion KRW.