An appraisal result indicated that if the Shinsegae and Shilla duty-free shops at Incheon International Airport were to be re-bid, the rental rates would decrease by about 40% compared to the current level.
On the 11th, the law firm Daeryuk Aju, which represents the Shilla and Shinsegae duty-free shops, reported that it received an appraisal report from Samil Accounting Corporation containing this information.
Earlier, the Shilla and Shinsegae duty-free shops applied to the Incheon District Court in April and May, requesting a reduction of 40% in the rental fees for cosmetics, perfumes, alcoholic beverages, and tobacco stores in the first and second passenger terminal duty-free shops against the Incheon International Airport Corporation. In response, the court commissioned Samil Accounting Corporation, chosen by the law firm Daeryuk Aju, to assess the rental rates.
According to the appraisal report, assuming that the average spending per passenger remains at the current level and considering the expected increase in outbound passenger numbers, the sales in the contested duty-free area are expected to grow by an average of 4.5% per year. However, taking into account the rental costs, losses are estimated to increase.
For example, the sales of the Shilla duty-free shop located in the DF1 zone are projected to be 713.2 billion won next year, with an operating profit before deducting rental costs of 197.8 billion won. However, after deducting the rental fee of 317.3 billion won, an operating loss of 119.4 billion won is anticipated. It is analyzed that if rental fees continue to be deducted in this manner until the remaining rental period in June 2033, operating losses will persist annually.
The appraisal estimated that if the duty-free area is re-bid, the rental fees would decrease by about 40% compared to the current situation. This is based on the judgment that bidders find it difficult to propose aggressive bidding prices, given the downward trend in the current market's average spending per passenger.
Sales of fashion, accessories, and luxury goods at the Incheon airport duty-free shops show a growth trend after recovering to 2019 levels. However, sales of cosmetics and perfumes, as well as alcoholic beverages and tobacco, remain at 53% and 65% of their 2019 levels, respectively. The items in the DF1 and DF2 zones operated by the Shilla and Shinsegae duty-free shops include cosmetics, perfumes, tobacco, and alcoholic beverages.
The appraisal pointed out that the change in consumption patterns of Chinese customers, which once contributed to the high growth of the past duty-free market, is now more practical and experience-oriented. The increase in the proportion of sales by Koreans purchasing from online duty-free shops when traveling abroad has also negatively impacted the sales of cosmetics and perfumes at Incheon airport. Moreover, the permission for online duty-free alcohol sales implemented in 2023 has further dispersed alcohol sales channels, negatively affecting the sales performance of alcoholic beverages at Incheon airport duty-free shops.
In relation to this case, Incheon International Airport Corporation and the Shilla and Shinsegae duty-free shops are facing a second mediation on the 14th, following the first mediation on June 30. According to industry sources, Incheon International Airport Corporation is said to be maintaining its intention not to participate in the second mediation session.