▲ Exterior view of Shinsegae Department Store Centum City branch
Shinsegae Department Store is expanding its business footprint around Centum City in Haeundae-gu, Busan, by acquiring the Lotte Department Store Centum City branch.
The company plans to link the Lotte Department Store Centum City branch and its development site with Shinsegae Centum City, which has surpassed an annual revenue of 2 trillion won.
Through this initiative, Shinsegae aims to create a complex commercial district equipped with shopping, cultural, and tourism functions.
Shinsegae Department Store decided to acquire the Lotte Department Store Centum City branch and submitted a business combination report to the Fair Trade Commission today (October 29).
Shinsegae Department Store Centum City and Lotte Department Store Centum City are located close to each other within the same block, with their outer walls facing one another.
Opened in 2009, Shinsegae Centum City has established itself as a representative landmark of Busan, functioning as a shopping space combined with leisure and cultural contents such as Spa Land and an ice rink.
In 2016, it became the first regional store to surpass 1 trillion won in sales, and recorded annual sales of over 2 trillion won for three consecutive years from 2023 through last year.
Shinsegae plans to organically connect the additional space secured through this acquisition with its existing space to develop it into a global landmark representing South Korea.
The company also plans to accelerate the development of Plot C within Centum City.
By creating a complex district including hotels, offices, and residences, Shinsegae envisions establishing a hub that encompasses business, lodging, and residential functions alongside shopping.
Through this acquisition, the company aims to improve operational efficiency and accelerate expansion-focused development centered around the Centum City branch.
Park Joo-hyung, CEO of Shinsegae, stated, "This acquisition holds great significance in that it has established a management environment where both companies can move beyond competition and further develop individually."
He added, "We will develop Shinsegae Centum City into 'Shinsegae Town,' where shopping, culture, tourism, and urban-style spaces are organically integrated, making it a key global landmark representing South Korea."
Through the sale of the Centum City branch, Lotte Department Store will be able to focus its investments by strengthening key stronghold stores and pursuing new shopping mall projects.
Lotte Department Store explained that although the Centum City branch has established itself as a major distribution hub in the eastern commercial district of Busan since its opening in 2007, there were limitations in securing growth potential and profitability due to changes in customer demand and the market environment.
After a multifaceted review, Lotte determined that it is efficient to reorganize its portfolio and concentrate its capabilities considering asset value and business viability.
The schedule for the termination of operations at the Centum City branch will be finalized after related reviews are completed, and normal operations will continue until the transaction is closed.
Regarding employees, Lotte plans to prioritize reassignment within the Busan commercial district and support tenant partners in transitioning their operations smoothly according to contract conditions.
Lotte also plans to continue investments in its other stores in Busan.
The Busan flagship store is preparing for a full-store renewal based on the growing sales trend among foreign visitors.
The Lotte Mall Dongbusan branch also plans to enhance its competitiveness by strengthening merchandising (MD).
(Photo provided by Shinsegae Department Store, Yonhap News)
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