[Why&Next] Park Joohyung of Shinsegae vs Jung Hyunseok of Lotte... The Big Two Department Stores and the '4 Trillion Won War'

First-Ever 4 Trillion Won Sales Race Among Department Stores
Shinsegae Gangnam Store Poised to Achieve the Milestone This Year
Lotte Jamsil Store, Led by a New Generation, in Hot Pursuit

Shinsegae Gangnam (left), Lotte Jamsil Town

The race for the title of the first department store in Korea to achieve an "annual transaction volume of 4 trillion won" is heating up between Park Joohyung, CEO of Shinsegae (age 66), and Jung Hyunseok, CEO of Lotte Department Store (age 50). Shinsegae Gangnam Store took an early lead with a transaction volume of 3.6717 trillion won last year, but Lotte Jamsil Store (Lotte Town Jamsil), with 3.301 trillion won in sales during the same period, is making a rapid chase.

According to the retail industry on August 20, Shinsegae Gangnam Store is expected to surpass 4 trillion won in annual transaction volume this year, becoming the first department store in Korea to do so. Last year’s transaction volume was 3.6717 trillion won, a 10.4% increase from the previous year (3.3269 trillion won). Even with only about 9% growth from last year, it will easily exceed 4 trillion won this year.

Shinsegae Gangnam Store: Driven by Luxury, Propelled by Premium Food and Pop-Ups

The Gangnam Store has scaled up every year, from 2.494 trillion won in 2021 to 2.8398 trillion won in 2022, 3.1025 trillion won in 2023, and 3.3269 trillion won in 2024. After breaking the 3-trillion-won barrier—the first among Korean department stores—in 2023, the store is now challenging the 4-trillion-won mark within just three years.

The key to Gangnam Store's growth has been its strategy of anchoring VIP customers with its competitive edge in luxury brands, while expanding its customer base with food products and pop-up events. The store boasts more than 100 luxury brand boutiques, including Hermès, Louis Vuitton, and Chanel. In addition, it offers a food section covering over 6,000 pyeong (approximately 19,800 square meters), including "Suite Park" (a dessert specialty area), "House of Shinsegae" (premium food hall), and "Shinsegae Market" (supermarket). This attracts both major luxury shoppers and younger customers looking for desserts and pop-up experiences.

A transaction volume of 4 trillion won is remarkable not only in Korea but also on a global scale. There are only two department stores in the world with a single-store transaction volume exceeding 4 trillion won: Harrods in London (approximately 4.8 trillion won) and Isetan Shinjuku in Tokyo (approximately 4.3 trillion won). If either Gangnam Store or Jamsil Store surpasses 4 trillion won this year, they will join the ranks of the world’s top-tier department stores. Some even expect Gangnam Store to exceed Isetan Shinjuku's transaction volume.

Industry Leader Lotte Loses 3-Trillion-Won Lead... Jamsil Town in Hot Pursuit

Lotte Jamsil Store is chasing quickly. Its transaction volume rose from 1.7973 trillion won in 2021 to 2.5982 trillion won in 2022, 2.7569 trillion won in 2023, 3.0551 trillion won in 2024, reaching 3.301 trillion won last year—a surge of 84% in just four years. To surpass 4 trillion won, Lotte Jamsil Store will need to grow by around 21% over last year’s performance. Whether this momentum in the first half of the year, marked by over 20% growth, will continue into the second half is key.

Lotte Jamsil Store is expanding its reach outside the department store walls. Not only Lotte Department Store and AvenueL, but also Lotte World Mall, Lotte World Tower, Lotte World, Seokchon Lake, and Signiel have all been integrated to transform the Jamsil area into a hub for shopping, tourism, and culture. In the first half of this year alone, a record-breaking number of more than 450 pop-up stores were held. Sales to foreign visitors more than doubled compared to the same period last year. With the continued strong growth of the Jamsil Store, Lotte Department Store is reportedly even considering delaying its previously planned large-scale renovation.

There is also growing anticipation for achieving 4 trillion won in sales. This year, the industry is seeing a continued rebound in luxury and fashion spending, fueled by an increase in foreign visitors and a booming stock market. Shinsegae Department Store’s total gross sales in the second quarter reached 2.017 trillion won, up 15.5% year-on-year. In particular, Gangnam Store’s sales grew by over 20%. Foreign customer sales in the first half soared to 580 billion won, a 120% jump. Lotte Department Store’s total sales for the division also rose by 8% to 4.5233 trillion won, driven by increased foreign tourists and strong sales across all product categories, including fashion.

13 Stores above 1 Trillion Won, 5 above 2 Trillion... Department Stores Scaling Up

As Gangnam and Jamsil stores sprint towards the 4-trillion-won benchmark, the “size” of department stores in Korea is also increasing. Last year, five stores surpassed the annual transaction volume of 2 trillion won: Shinsegae Gangnam, Shinsegae Centum City, Lotte Jamsil, Lotte Main Store, and Hyundai Department Store Pangyo. In 2021, only Shinsegae Gangnam had achieved this feat, meaning the number has grown to five in just four years.

Shinsegae’s Daegu Store and Main Store are also approaching the 2-trillion-won milestone. Shinsegae Daegu had 1.6629 trillion won in transactions last year, leaving about 337 billion won to reach 2 trillion. The Main Store’s growth has been even steeper: From 1.2525 trillion won in transactions last year, it posted 55% growth in the first quarter and 77% in the second quarter this year, the highest among Shinsegae’s thirteen stores. If this trajectory continues, Shinsegae could have up to four stores exceeding 2 trillion won, following Gangnam and Centum City.

At one point, joining the “1-trillion-won club” was the hallmark of department store success. Last year, thirteen stores earned this distinction. Shinsegae leads with five stores: Gangnam, Centum City, Daegu, Main Store, and Daejeon Art & Science. Hyundai Department Store has four: Pangyo, The Hyundai Seoul, Main Store, and Trade Center. Lotte follows with three: Jamsil, Main Store, and Busan Main Store. Hanwha Galleria’s luxury hall was also included.

For Lotte, the Incheon Store is aiming to become a new “1-trillion-won department store” this year. Its transaction volume has steadily increased from 685 billion won in 2021 to 748.1 billion in 2022, 752.7 billion in 2023, 789.1 billion in 2024, and 829.8 billion in the previous year. If it grows by more than 20% over last year, it will pass the 1-trillion-won threshold for the first time.

The Real Competition Begins after 4 Trillion Won... Will CEO Park Joohyung Succeed with Large-Scale Projects?

Scaling up store size step by step is a key achievement for both CEOs. Appointed in 2024, CEO Park’s task is not only to help the Gangnam Store achieve 4 trillion won, but also to develop the Main Store and Daegu Store into new “2-trillion-won stores.” Similarly, CEO Jung, who took the helm of Lotte Department Store this year, faces the challenge of pushing Jamsil Store beyond 4 trillion won and getting Incheon Store into the "1-trillion-won club."

For CEO Park, a major task lies in realizing Shinsegae's various large-scale development projects. Major initiatives are lined up nationwide, including Suseo, Gwangju, Songdo, and Centum City. Not only must he scale up existing stores, but also establish new growth hubs that will drive the group’s growth for the next decade.

CEO Park is known as one of Korea’s most accomplished executives in planning and development. With a background in planning within the management support office and as head of new business, he also concurrently serves as CEO of Shinsegae Central. This is why he manages not only department store operations but also large real estate development and the running of mixed-use facilities.

One flagship project is the Suseo Station Transfer Center Complex Development. Shinsegae is collaborating with Hanwha and KT Estate to create a massive mixed-use complex in the Suseo Station area, featuring a department store, commercial offices, accommodation, and cultural facilities. Once completed, this will provide Shinsegae with a new base in southeastern Seoul, following the Gangnam Store.

In Gwangju, Shinsegae is pursuing a large-scale project to redevelop the area surrounding Gwangju Shinsegae and Gwangju General Bus Terminal U Square, integrating the terminal, hotel, and cultural facilities to form a leading mixed-use hub in the Honam region—not merely expanding the department store. Additional development projects in Songdo and Centum City also lie ahead for CEO Park.

CEO Jung Hyunseok: Sorting Out Profitable Stores

The challenge handed to CEO Jung is "sorting the wheat from the chaff." Lotte, with 30 stores—the most among Korea’s three major department store chains—faces a wide gap in store performance. While Jamsil Store surpassed 3 trillion won last year, other stores like Gwanak, Sangin, Mia, and Pohang were stuck in the 100 billion won range. The transaction volume of Jamsil Store alone is over 30 times larger than that of Gwanak Store. The issue is compounded by several lower-ranked stores experiencing negative growth: last year, Gwanak, Guri, Yeongdeungpo, and Pohang posted declines of 3% to 9%.

Lotte has already begun restructuring its stores. After closing the Masan Store in 2024, the Bundang Store was shut down in March this year, and the sale of Mia Store is underway. This reflects its “selection and concentration” strategy of eliminating stores with low growth potential. Conversely, Lotte is making aggressive investments in stores with proven growth, with Incheon Store set to become its third “Lotte Town” after Myeongdong and Jamsil. After completing a three-year store renewal, Lotte will begin the second stage—modernizing the Incheon General Bus Terminal—in the second half of this year. Plans include relocating and rebuilding the aging bus terminal to a nearby site and transforming the original terminal site into a mixed-use district with shopping and cultural functions. For the first seven months of this year, Incheon Store sales increased 25% over the previous year, and overseas fashion sales jumped 40%.

During his tenure as CEO of FRL Korea, CEO Jung slimmed down inefficient Uniqlo outlets while boosting key stores and online competitiveness. Observers expect him to focus on store profitability and growth potential at Lotte Department Store, even at the expense of reducing total store numbers. He recently made personnel changes among branch managers at Cheongnyangni and Sangin stores, bringing change to the field as well.

An industry official said, "The emergence of 4-trillion-won stores signifies more than just a record at a single location; it shows that consumption is concentrating in high-competitiveness mega-stores. Going forward, competition among department stores will become less about increasing the sheer number of stores and more about scaling up core stores and establishing regional hubs."

This content was produced with the assistance of AI translation services.