Vice President Kim Min-gyu Directly Rebuts CEO Jeong Jun-ho's Remarks
"Maximize Our Own Competitiveness Rather Than Comparing," He Also Criticizes
Jung Jun-ho, CEO of Lotte Department Store, mentioned the Hwaseong International Theme Park complex development project and Starfield, prompting an unusual direct rebuttal from Shinsegae Group.
On the 24th, Kim Min-gyu, Vice President and Head of Management Support at Shinsegae's Management Strategy Office, said in a phone interview with this publication, "Lotte Department Store is not in a position to be so relaxed in the market as to worry about Shinsegae's financial situation." He added, "It seems that such remarks came out because Lotte Department Store lacks experience in large-scale global joint development projects like Hwaseong International Theme Park. The method of capital procurement varies depending on the scale of the project, and through the experience with Starfield, the know-how has been sufficiently internalized, so there is no need to worry."
This was a rebuttal to the pessimistic outlook Jung expressed the previous day regarding the Hwaseong International Theme Park complex development project promoted by Shinsegae during a mid-to-long-term strategy briefing held at Lotte Hotel in Jung-gu, Seoul. At that time, Jung said, "Considering financial capabilities, I doubt whether (Shinsegae) can really develop a scale of 1 million pyeong." He predicted that it would not be easy for Shinsegae, whose financial stability has significantly deteriorated due to poor performance, to raise over 4 trillion won in project costs.
Kim also countered Jung's claim that Time Villas Suwon has higher shopping value than the nearby Starfield Suwon, saying, "Starfield Suwon is not a department store, so it operates a lively business with about 350 attractive tenants that are modern and targeted, without luxury brand stores." He emphasized, "The fact that many customers visit is more meaningful data for a landmark shopping mall than the average spending per customer mentioned by CEO Jung."
Kim denied Jung's statement that the average spending per customer at Starfield Suwon is only 50,000 won. Kim said, "The average spending per customer at Starfield Suwon is not 50,000 won but 125,000 won," adding, "I am glad that our information is well managed and not leaked." He also invited Jung, saying, "It would be good if you visit once and then speak." Previously, Jung stated that the average spending per customer at Time Villas Suwon was 120,000 won, higher than that of Starfield Suwon.
Regarding Jung's comment that "it is fortunate that a considerable number of the 240 brands that closed during the renewal process of Time Villas Suwon moved to Starfield Suwon," Kim responded, "It is not something to be fortunate about but rather something to regret." He also said, "Currently, those 240 brands are very fortunate."
Joonho Jung, CEO of Lotte Department Store, explaining the shopping mall business strategy of Lotte Department Store at a press conference held on the 23rd at Lotte Hotel in Jung-gu, Seoul. [Photo by Lotte Department Store]
The previous day, Jung showed confidence by presenting a photo of Starfield as a control group while explaining the design plan of Time Villas. Kim countered, "The design of Starfield is created to maintain consistency and efficiency in the flow of movement," adding, "It is not uniform but an efficient design that maximizes customer convenience." He then targeted the design plan of Time Villas, saying, "Just because it looks good and beautiful doesn't mean it is comfortable clothing."
Kim also pointed out, "Maximizing our competitiveness creates a healthy business ecosystem." This revealed his discomfort with Jung repeatedly comparing Starfield and emphasizing the advantages of Time Villas during the briefing the previous day.
After a senior Shinsegae official showed such a sharp reaction, Jung expressed an apology and attempted to ease tensions. A Lotte Department Store official said, "The management teams of both companies communicated about the matter, and we conveyed our apologies to the management of E-Mart for expressions that caused misunderstandings, which were unintended."
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