Published : Aug. 18, 2016 - 11:56
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THE INVESTOR] Lotte and Shilla duty-free stores dominated the industry, showing the strongest-ever performance in the first half of this year.
According to Financial Supervisory Service data on Aug. 18, Hotel Lotte’s revenue in the duty-free division came to 2.73 trillion won (US$2.47 billion), up 27.8 percent on-year in the first half, accounting for 47.3 percent share in the Korean duty-free sales market. Operating profit edged up 1.4 percent to 232.6 billion won.
Shilla Duty-free Store at Changi Airport in Singapore.
Hotel Shilla’s duty-free business also posted record-breaking turnover of 1.53 trillion won in the first half, up 9.3 percent from the same period last year. It takes up 26.4 percent of the total duty-free sales.
Its operating profit, however, fell 42.4 percent to 43.1 billion won largely due to spending on marketing for its joint venture with Hyundai Development Company, HDC Shilla Duty-free Store.
Shilla I’Park Duty-free Store, open since December last year, failed to meet its sales objective. All the downtown duty-free stores that have been granted permission to operate have yet to turn enter profitability, with operating losses racking up 17.5 billion won.
It will take more time for them as “duty-free business requires much investment in the early stages,” industry sources said, adding that although Lotte will suffer from the closure of the Jamsil World Tower branch, “Lotte and Shilla will maintain their lead for the time being.”
By Hwang You-mee (
glamazon@heraldcorp.com)