Hyundai Department Store will establish a premium outlet in Gyeongsan, Gyeongbuk, following its outlet in Busan. Currently, Hyundai Department Store operates eight outlet stores, most of which have been focused on the Seoul metropolitan area and Daejeon. Industry analysts suggest that Hyundai is intensifying its offline retail expansion in the Yeongnam region with the launch of premium outlets.
According to the retail industry on the 24th, Hyundai Department Store's affiliate Hanmoo Shopping was selected as the successful bidder with a bid of 99.45 billion won at the auction for retail commercial facility land (109,228㎡) in the knowledge industry zone of Gyeongsan on the 19th. Hyundai, which participated in the bidding alongside Shinsegae Simon, submitted a bid significantly higher than the bidding base price of 56.58 billion won.
Hyundai plans to establish the largest premium outlet in the region by 2028. The area is expected to have high potential as an outlet site due to its good accessibility to nearby cities such as Daegu, Yeongcheon, and Pohang.
◇Entering the outlet business for 10 years... Expanding presence in the Yeongnam region
Previously, Hyundai Department Store purchased a land of 86,015㎡ in Eco Delta City, Gangseo-gu, Busan, and announced plans to complete the premium outlet by 2027. The reason Hyundai Department Store is launching large outlets in succession is that it believes it has accumulated know-how from over a decade of outlet operations.
Hyundai entered the outlet business on Feb. 27, 2015, by opening the Hyundai Premium Outlet Gimpo near the Ara Gimpo passenger terminal in Gimpo, Gyeonggi Province. The following year, it opened the Hyundai Premium Outlet Songdo and the Hyundai City Outlet Garden 5, followed by the Hyundai Premium Outlet Songdo Daejeon (2020) and Namyangju Space One (2020), establishing a total of eight stores, including four premium outlets and three urban-type outlets.
Last year, it launched a new urban shopping mall format, "Connect Hyundai," which combines the strengths of department stores and outlets, receiving positive responses.
In its first year of the outlet business, annual sales were at the level of 300 billion won, which grew to 2.8 trillion won last year. The increase in sales last year was 9.2% compared to the previous year, higher than competitors Shinsegae (2.7%) and Lotte (0.6%). All four premium outlets made it to the top 10 in sales among 35 outlets nationwide, earning the evaluation of stable operation. This year, Hyundai Department Store aims to surpass annual sales of 3 trillion won.
Hyundai noted the success factors of the outlet business as breaking down the boundaries between shopping mall types, leveraging cultural and artistic content and geographic advantages of being close to urban areas. They explained that this has transformed the perception of outlets from merely a place selling goods cheaply to "a place where shopping can be enjoyed alongside leisure."
The Hyundai Premium Outlet Gimpo, which attracts more than 10 million visitors annually, features a central canal 450 meters long where customers can leisurely stroll and enjoy fireworks with a view of the Han River. The Songdo location and Namyangju Space One collaborated with world-renowned artists such as Julián Charrière and Jaime Hayon to create cultural and artistic spaces.
All Hyundai Premium Outlet stores are adjacent to urban areas, with half of the sales generated during the week. While typical suburban premium outlets target weekend visitors, these outlets, being close to the city, also attracted weekday grocery shoppers.
◇Differentiating through culture and art... New brand identity also in preparation
Hyundai Department Store aims to leverage its 10 years of outlet operation know-how for new openings and store renovations for a second leap. In the first half of this year, it plans to open the second Connect Hyundai store in Cheongju, followed by the establishment of premium outlets in Busan and Gyeongsan. Interest is particularly high in whether these new openings in Busan and Gyeongsan, regions where Hyundai's retail presence has been weak, will present an opportunity for a turnaround.
Currently, the retail market in the Yeongnam region is led by Shinsegae Centum City in Busan, which surpassed annual sales of 2 trillion won last year, and Shinsegae Daegu, with annual sales in the range of 1.5 trillion won. In Daegu, while the Hyundai Department Store Daegu once ranked first in the region, the ranking changed when Shinsegae Daegu opened in 2016. Shinsegae Department Store aggressively introduced luxury brands such as Erussha (Hermès, Louis Vuitton, Chanel) to its Daegu store, entering the "1 trillion club" in just 4 years and 11 months.
Accordingly, Hyundai rebranded the store to "The Hyundai Daegu" in 2022. This marks the second store under the brand, following The Hyundai Seoul in Yeouido, targeting the local MZ generation.
In 2026, Lotte Department Store's complex shopping mall Taevillas Suseong is expected to open in Daegu, intensifying competition in the local retail market. The distance between the Gyeongsan knowledge industry zone, which Hyundai acquired, and Taevillas Suseong is about 20 km, with a travel time of around 40 minutes by car. Taevillas Suseong is being designed by the British architectural firm LDA, which also designed The Hyundai Seoul.
A representative of Hyundai Department Store said, "We are currently preparing to implement a new brand identity (BI) as early as the first half of the year, aiming to quickly redesign the content unique to Hyundai outlets from square one in response to the rapidly changing retail market to set a new milestone once more."