South Korea's department store industry is set to produce its first single store to exceed 4 trillion won ($2.9 billion) in annual sales. Shinsegae Department Store's Gangnam branch has all but come within sight of breaking that mark this year, while Lotte Department Store's Jamsil branch is following close behind on rapid growth. Expanded luxury lineups, a run of renovations and rising spending by foreign tourists are combining to push up sales quickly at the largest flagship stores.
Sales at the Shinsegae Gangnam branch rose more than 20% in the first half of this year from the same period a year earlier, according to the retail industry on the 18th. Given that annual sales last year were about 3.67 trillion won, growth of around 10% this year alone would be enough to clear the 4-trillion-won threshold. With double-digit growth recorded in the first half, the industry sees the Gangnam branch's 4-trillion-won annual sales as all but a foregone conclusion.
The Lotte Jamsil branch is also within sight of joining the 4-trillion-won tier. Its first-half sales this year likewise rose in the 20% range from a year earlier, according to industry accounts. Having posted about 3.3 trillion won in sales last year, the store could record sales approaching 4 trillion won this year barring any particular setback in consumer sentiment or business conditions in the second half, observers say.
The pace of growth at the Shinsegae Gangnam and Lotte Jamsil branches stands out in particular. The Shinsegae Gangnam branch is looking at breaking 4 trillion won just three years after it first topped 3 trillion won in annual sales in 2023. The Lotte Jamsil branch, too, is on the verge of joining the 4-trillion-won tier just two years after reaching the 3-trillion-won mark in 2024.
Even when the department store business was relatively weak, the two stores posted growth rates well above the market average. According to the Ministry of Trade, Industry and Energy, growth in domestic department store sales came to 2.2% in 2023, 1.4% in 2024 and 4.3% in 2025. Over the same period, the Shinsegae Gangnam and Lotte Jamsil branches sustained annual growth of roughly 6% to 10%. This year, the broader business has also turned to a full-fledged recovery. With domestic department store sales in the first half rising about 20% from a year earlier, the two stores' expansion is picking up even more speed, analysts say.
What underpins the strong growth at the two stores is powerful product competitiveness and a surrounding commercial district with deep buying power. Both the Shinsegae Gangnam and Lotte Jamsil branches are their respective companies' flagship stores carrying the so-called "Ereusha" — Hermès, Louis Vuitton and Chanel — securing strong drawing power centered on luxury goods. The thick demand from high-income consumers in the greater Seoul area around Gangnam and Jamsil is another strength. Recently, as foreign tourists' shopping routes have widened from downtown areas such as Myeongdong into the Gangnam area, foreign sales have also established themselves as a new growth engine.
A run of renovations and stronger content are also driving sales growth. The Shinsegae Gangnam branch has continually refurbished key spaces, including its food hall, strengthening content designed to keep shoppers on-site longer. The Lotte Jamsil branch, too, has been raising its competitiveness in luxury, fashion and food and beverage (F&B), while expanding mixed-use content that lets visitors enjoy dining, culture and experiences in one space, not just shopping.
The strong-growth trend is spreading to other major stores. The Shinsegae main store, which posted about 1.3 trillion won in sales last year, saw first-half sales this year rise about 60% from a year earlier. If the current trend holds, it is likely to top 2 trillion won in annual sales for the first time. The Lotte Incheon branch is also seeing the full effect of a large-scale renovation that spanned about three years. After recording about 830 billion won in sales last year, it is showing growth of around 20% again this year and expects to enter the 1-trillion-won annual sales tier.
"Amid an overall recovery in the department store market, sales are concentrating even more in top-tier stores that combine luxury and fashion competitiveness with foreign demand, centered on the greater Seoul area," an industry official said. "As investment in large-scale renovations and differentiated content translates into actual foot traffic and sales growth, major stores this year could far exceed their previous sales levels."
