Fashion
Two international airports in are set to review operational licenses for South Korea duty free shops.
But the upcoming bids are unlikely to become competitive due to sluggish profitability, industry sources told Yonhap on Wednesday.
Gimpo International Airport in western Seoul is expected to open a bid for tax-free shops later this month as the current operating rights expire in May after five years of operation.
Currently, Hotel Lotte Co. and Hotel Shilla Co. have duty-free shops at the airport.
Gimhae International Airport, west of the southern port city of Busan, also has to select a new operator as Shinsegae Co, a major retailer, shut down its store in December to focus on its city outlets.
Shinsegae won a right to open a new duty-free shop in Myeondong, a popular tourist destination in downtown Seoul.
While several local retailers threw hats into the ring for licenses in downtown Seoul last year to attract affluent Chinese shoppers, the upcoming bid is not likely to fuel competition as current shops at the airports have had difficulty making ends meet.
Sales at the Gimpo and Gimhae outlets stood at 140 billion won (US$116 million) and 130 billion won, respectively, last year, according to their financial reports.
Hotel Lotte said it plans to renew its license for Gimpo and decide on the Gimhae store after considering potential profitability.
The unit under retail giant Lotte Group lost its license in southern Seoul in a tightly contested bid amid a bitter succession feud between the founder’s two sons.
