Doosan, Shinsegae lock horns over urban duty-free license
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Retail giant Shinsegae and industrial behemoth Doosan Group on Monday locked horns over the special license to run three urban duty-free stores in Seoul.
With the urban duty-free stores regarded as a lucrative business for the sluggish retail industry, the chiefs of both companies vowed to win the license that could guarantee trillions of won in revenue over the next 10 years.
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| Doosan Group chairman Park Yong-maan (Yonhap) |
Doonsan Group chairman Park Yong-maan said he would fully leverage his 20-year experience in publishing high-end fashion magazines. “From 1995, I have been deeply engaged in the publication of the Vogue magazine, with my name on the masthead every month,” Park told reporters on Monday.
“The luxury goods makers know that Doosan has all its takes to create luxury contents, and trust us,” he said, referring to the endorsement of about 400 luxury goods makers — including Louis Vuitton and Ferragamo — for Doosan’s duty-free shop, which was clearly influenced by the Vogue-connection
Park on Monday also declared the establishment of the Dongdaemun Future Foundation with investment of 10 billion won ($8.8 million) from Doosan Group and an equal amount from his own pocket. He explained that the duty-free store would revitalize the Dongdaemun fashion district with 13 large malls.
“About 30 percent of the stores are currently empty. But if we get the license to operate a duty-free store we will be able to fill them up, create jobs and attract more foreigners to shop in Seoul’s oldest commercial district,” said Park, who also chairs the Korea Chamber of Commerce and Industry.
Doosan joined the bidding war in September, citing its 16 years of experience in running Doota shopping mall in central Seoul.
“From 1995, I have been deeply engaged in the publication of the Vogue magazine, with my name on the masthead every month,”
Its bid comes at a time when the company has been struggling in other businesses — in the first six months, Doosan Corp. marked a loss of 66.9 billion won, while Doosan Heavy Industries, Doosan Infracore and Doosan E&C saw 114 billion won, 34.4 billion won and 86.5 billion won losses, respectively. The retail industry with abundant cash flow is expected to ease the strain, business insiders said.
Shinsegae, which joined the duty-free industry in 2012 by acquiring Paradise Group based in Busan, also started gearing up for a duty-free store in Seoul.
Shinsegae DF — which currently operates stores inside Incheon International Airport and Paradise Hotel Busan, and will soon run another on Hainan Island in China — said it will nurture Korean products. The company is planning to create 14-story duty-free store in Mesa shopping mall and Shinsegae Department Store in Myeong-dong, Seoul. The country’s second-largest retailer led by group vice chairman Chung Yong-jin hopes the duty-free store will generate 10 trillion won in sales between 2015 and 2020.
“With our ample know-how in the high-end retail business we will nurture Korean products as global luxury goods, just as AmorePacific’s Sulwhasoo and fashion accessory maker MCM did,” said Shinsegae DF CEO Sung Young-mok at a press conference which coincided with Doosan’s media briefing.
Sung also pledged to attract 17 million foreign tourists to downtown Seoul by 2020, up from 9.27 million in 2014. It also vowed to invest 270 billion won into boosting the local economy.
“We will provide more opportunity to the local producers,” Sung said.
The customs authorities are expected to begin their field examination around next week, and the announcement of the license winners is expected around early November.
Questions & Answers
Q.What experience does Doosan Group highlight to support its bid for an urban duty-free license?
What experience does Doosan Group highlight to support its bid for an urban duty-free license?
Doosan Group Chairman Park Yong-maan references his 20 years of experience publishing high-end fashion magazines, including Vogue, to show his understanding of luxury goods. The company also mentions its 16 years of operating the Doota shopping mall.
Q.How much investment is Doosan Group putting into its Dongdaemun Future Foundation?
How much investment is Doosan Group putting into its Dongdaemun Future Foundation?
Doosan Group is investing 10 billion won into the Dongdaemun Future Foundation. Chairman Park Yong-maan is contributing an equal amount from his own personal funds, totalling 20 billion won.
Q.What are Shinsegae’s plans for nurturing Korean products if it wins the license?
What are Shinsegae’s plans for nurturing Korean products if it wins the license?
Shinsegae plans to nurture Korean products as global luxury goods. The CEO referenced successful examples like AmorePacific’s Sulwhasoo and MCM, aiming to elevate local brands on the international stage.
Q.What financial goals does Shinsegae have for its proposed duty-free store in Seoul?
What financial goals does Shinsegae have for its proposed duty-free store in Seoul?
Shinsegae hopes its duty-free store will generate 10 trillion won in sales between 2015 and 2020. It also vowed to invest 270 billion won into boosting the local economy.
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