SOUTH KOREA. Following his company’s recent acquisition of the Samsung Plaza department store, Aekyung President Chae Seung-seok this week announced ambitious plans to take on the country’s three retail giants, Lotte, Shinsegae and Hyundai.
Aekyung’s chain of department and duty free stores (the latter trading as AK Duty Free) generated sales of around KW600 billion (US$603 million). AK Duty Free is one of four duty free retailers at Seoul Incheon International Airport, a location that is the subject of intense interest in the global travel retail community as Incheon International Airport Corporation finalises details for what amounts to the world’s biggest duty free tender by early 2007.
The single or multiple tender will cover the existing Main Terminal Building (MTB) at Seoul Incheon Airport and Concourse A. Food & beverage is also likely to be put to tender.
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| AK Duty Free is one of Seoul Incheon’s ‘big four’ alongside Lotte Duty Free, DFS and Duty Free Korea | |
The tender/s will represent the most important bidding opportunity in the industry in years – only London Heathrow generates greater duty free sales than Seoul Incheon and it is run in-house by BAA-owned World Duty Free. In 2005 Incheon posted duty free sales of KRW754,536 million (US$785 million) out of total commercial revenues of KRW891,267 million (US$926.9 million).
The next biggest duty free location is Dubai Duty Free with sales of US$590 million in 2005 – again run in-house.
“We want to be one of the big three but we will still focus on profit not just size“ |
Chae Seung-seok, President, Aekyung |
AK Duty Free is clearly determined to hold on to its Incheon business amid its wider expansion plans. The acquisition of Samsung Plaza on 6 November should boost the company’s sales to KW1.2 trillion next year, the report said.
“We want to be one of the big three,” Chae said, “but we will still focus on profit not just size. Having a duty free shop in or near Samsung Plaza is my goal, and I will definitely achieve it.”
The new acquisition will initially keep trading under the Samsung name. “In the long run, a new marque to cover both the department and duty free shop division will be developed,” Chae told local reporters.
Currently Aekyung owns two department stores, in Guro and Suwon, Gyeonggi province, and four duty free shops. It plans to add further duty free stores at Gimhae International Airport, which serves Busan, and at Daegu International Airport.
MORE STORIES ON AK DUTY FREE
Incheon International Airport Corp opens bidding for major commercial development plan – 14/07/06
Incheon International Airport Corp prepares for world’s biggest airport duty free tender – 13/04/06
