The Grand Department Store Ilsan branch, located in Goyang City, Gyeonggi Province, will cease operations at the end of February next year. The Grand Department Store once demonstrated its presence in the retail industry by operating department stores and marts in areas such as Gangnam in Seoul. However, with the closure of its last remaining department store, it will withdraw from the retail sector.
According to the retail industry on the 15th, the Grand Department Store informed customers at the Ilsan branch that it would end department store operations on February 28 of next year. It also advised customers to convert accumulated points into purchase vouchers and use them before the store closes.
The Grand Department Store is a retail company founded by Chairman Kim Man-jin of Venueje in 1971. It began operations with the Grand Department Store Gangnam branch in 1986 and managed department stores, marts, super markets, and outlets. However, after facing management difficulties due to the Asian financial crisis, it sold the Gangnam branch to Lotte Shopping in 1999. Since then, the Grand Department Store has only operated the Ilsan branch after transferring its marts and super markets to Lotte Shopping and E-Land.
Last year, the department store's sales totaled approximately 18 billion won, a decrease of about 32% from the previous year. This is about one-fourth of the last year’s sales (74 billion won) of Lotte Department Store Masan branch, which closed due to poor performance.
According to industry sources, Venueje plans to approve the closure of the Grand Department Store Ilsan branch at the shareholders' meeting on the 15th of next month and intends to convert the store into a wedding hall. This department store already ceased operations of its online shopping mall at the end of June and dismantled the relevant business unit in August.
Industry analysis suggests that polarization among commercial districts is intensifying, leading to a restructuring of the market centered around large department stores. As of the end of last year, the sales of 70 branches of the five major department stores in the country (Lotte, Shinsegae, Hyundai, Galleria, and AK) totaled 39.6185 trillion won, with the combined sales of the top 12 branches—each generating over 1 trillion won in annual revenue—exceeding half of the total.
In contrast, the total revenue of 20 department stores with annual sales of under 200 billion won was less than the sales of Shinsegae Department Store Gangnam branch, which surpassed 3 trillion won last year.
As a result, the restructuring of smaller local department stores is accelerating. Daejeon Seibu Department Store stopped operations in May after being sold to the asset management company Together Investment Management. NC Department Store Busan Seomyeon also closed due to a failed re-contract with its building owner, Daewoo Construction, in the same month. It is reported that mixed-use buildings will be constructed on the sites of both department stores. Additionally, Daegu Department Store, a local department store based in Daegu, is currently in the process of public sale after closing its main store for the first time in 52 years in 2021.
Some large corporations are in a similar situation. Lotte Department Store, which has the most department store branches in the country, ended operations at its Masan branch at the end of June. Lotte Department Store has plans to restructure 10 of its lowest-performing branches over the next two to three years.
Experts predict that this trend will continue into next year. Kim In-ho, Vice Chairman of Business Insight, noted, "Overall department store sales are expected to decline by 1.7% next year," adding that the restructuring issues of various department store branches, including those in local areas, are likely to become more pronounced.