Shinsegae acquires duty free stake
Korean department store operator Shinsegae Group has branched into the duty free business by acquiring a stake in Paradise Duty Free.
Shinsegae has acquired 81 per cent stake of Busan-based Paradise, for which it reportedly paid 93.15 billion won (US$82 million).
Paradise, which holds five per cent of Korea’s duty free market, generated 6.5 billion won (US$5.8 million) operating profit on sales of 145 billion won (US$128 million) last year.
Shinsegae’s entry into the duty free business heats up the competition with rivals Lotte Duty Free and The Shilla Duty Free, which was poised to acquire Paradise in 2010, but, did not complete the deal.
Following the acquisition, Paradise is expected to offer a wider choice of international and local brands, targeting foreign tourists to Busan.
“Paradise Duty Free will act as a new growth engine for both Busan and Shinsegae. Our focus is to achieve win-win benefits for the region and the company by satisfying demands of foreign tourists and taking advantage of existing tourism infrastructures,” said Shinsegae Group vice chairman Chung Yong-jin.
Shinsegae opened its first department store in Korea in 1930. In 2009, it opened the world’s largest department store, the Centum City, in Busan.