Q1 Operating Profit of 5.9 Billion KRW and Sales of 23.9 Billion KRW Recorded
Decent First Performance in Gyeonggi Nambu's Largest Battleground
Lotte Prepares Counterattack with August Opening of 'Time Villas'
AK Plaza Attracts New Premium Brands
Shinsegae Group's complex shopping mall Starfield has made a soft landing in the Suwon commercial district, considered the largest retail battleground in southern Gyeonggi Province. Lotte Mall and AK Plaza, the established players in this area, plan to counter Starfield Suwon through extensive renovations.
According to Emart on the 24th, Starfield Suwon recorded sales of 23.9 billion KRW in the first quarter of this year. Operating profit was 5.9 billion KRW, turning a profit from the first quarter after opening. Net profit was 2.9 billion KRW. These results are higher than those of another store in southern Gyeonggi, Starfield Anseong, but lower than Starfield Hanam.
The industry evaluates that Starfield Suwon has received a decent initial report card. In the Suwon commercial district, not only Starfield Suwon but also Lotte Mall Suwon, AK Plaza Suwon, and Galleria Gwanggyo are located in close proximity. Including Lotte Department Store Dongtan in Hwaseong, there are a total of five shopping complexes.
The strong performance of Starfield Suwon is analyzed to be partly due to specialized stores and spaces targeting the MZ generation (Millennials + Generation Z). In particular, the 'Byeolmadang Library,' recognized as the first large-scale library in the metropolitan area, has become a hotspot among the MZ generation and a landmark of Starfield Suwon. On social networking service Instagram, countless photos taken with the Byeolmadang Library as the background have been posted.
Since Starfield Suwon succeeded in its initial popularity, it is expected that the growth in performance will accelerate from the second quarter. Unlike the early days when some stores were not open, from the second quarter onward, it will be possible to operate as a complete entity. Additionally, sales and operating profit, which were affected by opening discounts, are also expected to improve further.
The soft landing of Starfield Suwon has tightened the nerves of nearby shopping malls. In particular, Lotte Mall Suwon, operated by Lotte Shopping, completed renovations sequentially since October last year and is scheduled to be reborn as the first 'Time Villas' premium complex shopping mall in August. Time Villas is based on a convergence model combining the strengths of department stores, outlets, and shopping malls. Lotte Shopping is confident that Time Villas will gain an advantage in sales competition against Starfield Suwon once it opens.
AK Plaza Suwon, which started renovations earlier than Lotte Mall Suwon, is confident in defending its performance. AK Plaza announced that its transaction amount in the first quarter of this year was 127.4 billion KRW, a 2.2% increase compared to the same period last year. Department stores record tenant fees as sales in accounting. AK Plaza operates four department stores in addition to Suwon, including Bundang and Pyeongtaek in Gyeonggi Province and Wonju in Gangwon Province, and owns five shopping malls in Seoul Hongdae, Gyeonggi Giheung, Gwangmyeong, Geumjeong, and Sejong City. The company's total sales last year reached 247.5 billion KRW, with an operating loss of 26.9 billion KRW.
However, AK Plaza Suwon plans to continue investing in brand revamps aiming to become the number one department store in the commercial district. It plans to attract new premium brands in the first half of the year and strengthen the attraction of family customers, new tenants in the commercial district, and wedding customers through lifestyle and baby/children renovations in the second half.
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