As domestic luxury consumption sentiment improves this year, the department store industry is enjoying a tailwind, and attention is turning to whether Hyundai Department Store Pangyo could reach 2 trillion won in sales. The Pangyo store posted about 940 billion won in sales in the first half, and given that the fourth quarter is typically the peak season for department stores, some say it could reach 2 trillion won by year-end.
According to the retail industry on the 22nd, Hyundai Department Store Pangyo recorded 940.6 billion won in sales in the first half of this year. That is up 10.3% from the first half of last year (852.5 billion won). Last year's sales were 1.7314 trillion won, ranking fifth among 68 department store branches nationwide.
Pangyo is the second-largest department store in the Seoul metropolitan area after Lotte Department Store Dongtan. It has six basement floors and 10 above-ground floors, with a sales area of 92,578 square meters (28,005 pyeong). In Aug. 2015, its opening year, it posted sales of about 800 billion won and has set a new record for maximum annual sales every year since. In 2020, its fifth year, it surpassed 1 trillion won in sales, overtaking the Apgujeong main store and the Trade Center store to become the No. 1 branch within Hyundai Department Store.
In 2022, Pangyo became the first department store in the Gyeonggi region to bring in Hermès, drawing attention. Major luxury jewelry brands, including Louis Vuitton, Cartier, Tiffany, Bulgari, and Van Cleef & Arpels, also have a strong presence there.
Because of regional characteristics, Pangyo has a high proportion of VIPs who are relatively young office workers with high income levels. Among Pangyo's VIP customers, those in their 20s and 30s exceeded 30% in 2023 and accounted for 33.4% last year. The amount they spent at Pangyo last year rose 31.3% from a year earlier. Hyundai Department Store also operates the "Club YP Lounge," an exclusive space for VIPs in their 30s or younger, at Pangyo and The Hyundai Seoul.
This year, Pangyo has worked to secure competitiveness by bringing in many luxury brands. In January, Swiss luxury watch brand Rolex opened a shop, and in May, Repossi, a high jewelry brand under LVMH, opened.
Then in Aug., the fifth Korean store of French luxury brand Goyard opened. Goyard had previously been available only at four locations nationwide—the Galleria Luxury Hall, Hyundai Department Store Trade Center, Shinsegae Department Store Gangnam, and Centum City—making it a brand known for scarcity.
This year, backed by revived luxury consumption sentiment, department stores nationwide are seeing rising sales centered on flagship branches with strong brand lineups. Shinsegae Department Store Gangnam, the top-grossing branch nationwide, posted 1.7329 trillion won in first-half sales, up 4.4% from a year earlier. During the same period, second-place Lotte Department Store Jamsil's sales rose 7.6% to 1.5925 trillion won.
This trend has continued into the second half. According to the Ministry of Trade, Industry and Energy's report released last month on "October sales trends at major retailers," year-over-year growth in department store sales of "overseas famous brands" continued to rise—July (11.3%), August (12.4%), September (12.6%), and October (19.5%).
Buoyed by the tailwind, Shinsegae Gangnam and Lotte Jamsil reached the 3 trillion won mark in cumulative sales three weeks earlier than last year. Shinsegae Gangnam surpassed 3 trillion won on the 7th of last month, and Lotte Department Store Jamsil did so on the 4th of this month. In addition, Daejeon's Shinsegae Department Store Art & Science crossed 1 trillion won in sales on the 21st of this month, the first time in the history of central region department stores.
Even if Hyundai Department Store Pangyo does not exceed 2 trillion won in sales this year, the odds of reaching it are expected to be much higher next year. With Lotte Department Store Bundang, a 10-minute drive away, slated to close in March next year, customer demand is expected to shift. An industry official said, "When a department store's annual sales exceed the trillion-won level, it carries significant weight in terms of store competitiveness."