Shinsegae Inc, a major retail conglomerate in South Korea, announced on Thursday that it plans to shut down its duty-free business unit in Incheon International Airport’s DF2 zone. This decision has been prompted by growing losses.
As South Korea’s second-largest department store chain, Shinsegae has resolved to enhance the operational efficiency of its duty-free business by confronting escalating losses head-on. The company intends to cease operations within the DF2 zone, which houses cosmetics, perfumes, liquor, and tobacco offerings, by April 27, 2026.
However, Shinsegae DF Inc’s duty-free outlets in the airport’s DF4 zone will continue business as usual.
A representative from Shinsegae cited a myriad of adverse and unpredictable circumstances plaguing the duty-free market, such as high exchange rates, economic downturn, and diminished spending among primary consumers. The company had previously sought rent modifications from the Incheon International Airport Corp (IIAC), but the airport authority denied these requests.
With the impending shutdown of its DF2 zone outlet, Shinsegae DF plans to concentrate on its continuing operations in the airport’s DF4 zone and its city center store in Myeongdong, central Seoul.
Just last month, Hotel Shilla Co relinquished its DF1 zone license to the airport due to mounting losses. The IIAC is predicted to initiate a new bidding process for the DF1 zone license previously held by Shilla Duty Free later this year.
Why is Shinsegae closing its duty-free business in the DF2 zone?
Shinsegae is closing its duty-free operations in the DF2 zone due to escalating losses and a desire to improve overall operational efficiency.
What areas does the DF2 zone cover?
The DF2 zone houses a variety of products, including cosmetics, perfumes, liquor, and tobacco.
What will be the future focus of Shinsegae DF?
Following the closure of its DF2 zone outlet, Shinsegae DF will focus on its remaining operations in the airport’s DF4 zone and its downtown store in Myeongdong.
