Department Stores Create Dedicated Cosmetics Divisions, Recruit Experts to Grow Beauty Business

Hyundai Department Store Establishes Dedicated Beauty Division
Shinsegae International Recruits Heo Minho, the "Architect of Olive Young's Success"
Expands In-House Select Shops and Discovers Indie Brands
Diversifies Business Through Product Development

Department stores are identifying cosmetics as a new growth engine and moving quickly to expand their businesses. Leveraging K-beauty's global standing, they are going beyond simple sales to broaden their business scope by directly discovering promising beauty brands and developing exclusive products. Recently, they have also been changing their organizational structures, establishing dedicated cosmetics divisions and bringing in professional executives.

According to the department store industry on November 13, Hyundai Department Store established a Beauty and Accessories Division under its Merchandising Headquarters in a regular personnel reshuffle and organizational reorganization last month. It separated the beauty and accessories operations from the existing Overseas Luxury Division and reorganized them as a separate unit. The move is seen as an effort to separate cosmetics, previously managed alongside luxury goods, into an independent business area and strengthen its capabilities in discovering brands and merchandise planning (MD).

Along with the reorganization, Hyundai Department Store is also expanding its own beauty select shop. In September, the company opened Khode, a dermabeauty select shop covering about 165 square meters (50 pyeong) on the first basement level of its Pangyo branch. It introduced around 60 dermabeauty brands, including Easydew and Madeca Pharmacia, which draw on pharmaceutical companies' technical expertise, and ForetDerm, developed by dermatologists. Hyundai Department Store plans to open Khode's second location at The Hyundai Seoul early next year and expand the shops to department stores and outlets. It also plans to develop skincare products exclusively for Khode in collaboration with pharmaceutical companies and others. Following its existing clean beauty select shop, BeClean, the company is adding a specialized channel focused on improving skin function as part of a strategy to segment its customer base.

Shinsegae Department Store's affiliate, Shinsegae International, appointed professional executives to its fashion and cosmetics divisions, respectively, in its regular personnel reshuffle last month. Heo Min-ho, regarded as the architect of CJ Olive Young's success, was brought in to lead the cosmetics division. During his tenure as CEO of CJ Olive Young, Heo expanded the company's store count from just around 40 to 1,100 by the time he stepped down. He is also considered a legendary figure for ushering in the era of 1 trillion won in sales. Heo will oversee not only Shinsegae International's cosmetics division but also serve as CEO of Shinsegae Casa.

Shinsegae International is targeting overseas markets by building on its own brands, including VIDIVICI and Yunjac, and adding AMUSE, an indie color cosmetics brand it acquired in 2024. The existing heads of its Cosmetics Division 1 and Cosmetics Division 2 will remain in place, with Heo overseeing both units. Shinsegae Department Store is also discovering K-beauty brands and attracting foreign customers through CHICOR, its separately operated beauty select shop. CHICOR plans to expand its current 21 stores to 40 by 2028.

Lotte Department Store is focusing on expanding sales channels for emerging brands. The Cast, a K-beauty platform that opened at its Cheongnyangni branch in April, selects and showcases indie brands and connects influencer livestreams with online purchases. The number of brands available on the platform grew from 30 at launch to 60 in just two months. Lotte Department Store has also confirmed plans to open a second location.

The company is also pursuing a premium strategy at its existing department store locations. In February, it opened a beauty specialty hall spanning about 400 pyeong on the first floor of its Nowon branch, expanding its Chanel and Dior Beauty stores while strengthening its niche fragrance offerings and personalized beauty services. In other words, it is simultaneously bolstering a platform to nurture new K-beauty brands and stores for premium cosmetics.

An industry official said, "Whereas department stores' cosmetics businesses once focused on bringing in and selling famous overseas brands, the focus has recently shifted toward directly discovering and nurturing K-beauty brands with strong growth potential." The official added, "Differentiating themselves from existing beauty specialty retailers through their own select shops and exclusive products will be key to their competitiveness going forward."

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