SOUTH KOREA. In dramatic breaking news, powerful Korean department store retailer Shinsegae Group today announced it has acquired an 81% holding in Paradise Duty Free.
Paradise, based in the city of Busan, is one of Korea’s and Asia’s leading duty free shop operators. The retailer generated sales of KRW145 billion (US$128 million) last year with an operating profit of around US$5.8 million. It has some 6,921sq m of retail space and an approximate 5% share of South Korea’s duty free market.
Its parent, Paradise Group, plans to focus instead on its hotel and casino business.
Shinsegae is reported to have paid KRW93.15 billion (US$82 million) to acquire its interest in Paradise in an amicable agreement. It will run Paradise through its Chosun Hotel affiliate.
The acquisition marks Shinsegae Group’s entry into the duty free industry (though it has run some landside units at Incheon International Airport for several years) and presents a potentially hugely powerful rival to South Korea’s established giants Lotte Duty Free and The Shilla Duty Free.
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Shinsegae Department Store is one of South Korea’s most powerful domestic market forces |
Shinsegae may attempt to secure a presence at Incheon International Airport where the contract of one of the incumbent operators, Korea Tourism Organization, comes to an end in February and is currently the subject of much political and commercial debate in Korea.
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Paradise Duty Free: An acclaimed, upscale downtown duty free retailer based in Busan |
As we reported, Shinsegae also recently expressed interest in the government’s proposal to permit “˜foreigner only’ duty free shops in other Korean cities from next year – a move that is yet to get final approval.
Paradise Duty Free had been set for acquisition by fellow Korean duty free group Shilla in 2010, a move that fell through.
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Paradise Duty Free was profiled in the May 2008 issue of The Moodie Report |
ABOUT SHINSEGAE
In 1930 Shinsegae opened the first department store in Korea, pioneering a retail channel that now features many of the nation’s most powerful companies, including Lotte. In 2009 it created “˜the world’s largest department store’ – a sprawling retail complex in Busan (near Paradise Duty Free).
It opened Korea’s first discount store, E-mart, in 1993, helping secure its position as the country’s leading distribution company.
Shinsegae also took over Walmart Korea and is a powerful player in the Chinese market. It has made no secret of its global ambitions and travel retail could now become a key channel for those plans.
