“We expect to open in late December,” Cha said. The duty free offer, one of Asia’s most ambitious and expansive, will occupy the third to eighth floors (the latter for back office space) of the former department store building, and will be targeted principally at Chinese shoppers.
The Moodie Blog
The Moodie Blog
Lunch with a great leader of Shilla, Samsung and Korean duty free
When Jason Cha entered the business in 2007, Shilla generated sales of around US$300 million. Last year they were close to US$3 billion, a ten-fold increase.
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“Basically we have finalised the drawings,” Cha said. “There are a lot of challenges for the Korean duty free business but there are even more opportunities – that’s why our government issued these new licences. As a big operator, we have the capability to manage this type of challenge and opportunity. So we have an optimistic view.”
The sheer scale of the new environment will allow Shilla to diversify its offer, presenting different categories, approaches and ambiences on the respective floors. While there be a luxury offer, Shilla will also present alternative ranges and environments for a younger clientele with different purchasing profiles.
“The advantage of the new store is that there also a department, discount shops and a lot of restaurants on the same site so people can enjoy everything in one place,” said Cha, noting a contrast with Shilla’s current downtown store adjacent to The Shilla Hotel, which is located away from other attractions.
STEP-BY-STEP AT INCHEON – BUT NO CHANEL
Meanwhile Shilla is set to begin its new Incheon International Airport duty free concessions from 1 September. As reported, the retailer was awarded three licences, comprising four beauty shops and five liquor & tobacco stores in Passenger Terminal Building West and 11 general merchandise shops in Passenger Terminal Building East.
It will operate initially out of temporary shops, renovating on a “step-by-step” basis (with perfumes & cosmetics opening in early November followed by liquor & tobacco and general merchandise before an overall Grand Opening in early 2016).
However one brand it will not stock within its beauty offer is Chanel. Over the past few months Chanel has been in dispute with Shilla and its arch-rival Lotte Duty Free over space demands at Incheon. Chanel, long piqued as a company by the blockbuster 550sq presence of Louis Vuitton at Incheon since September 2011, had demanded a doubling of its current 30sq m space in both retailers’ main beauty stores under their newly won contracts.