The Grand Department Store in Ilsan (Image courtesy of the Grand Department Store)
GOYANG, Dec. 16 (Korea Bizwire) – The Grand Department Store in Ilsan, Gyeonggi Province, will permanently close its doors at the end of February, marking the final chapter for a retail chain that once maintained a significant presence in South Korea’s upscale shopping districts, including Seoul’s Gangnam area.
According to industry sources on December 15, the company has notified customers of the February 28 closure date and advised them to convert and use their accumulated reward points before operations cease.
Founded in 1971 by Kim Man-jin, chairman of Venue G, Grand Department Store expanded its retail footprint with the opening of its Gangnam location in 1986, later diversifying into markets, supermarkets, and outlets. However, the company faced financial difficulties following the 1997 Asian financial crisis, leading to the sale of its Gangnam store to Lotte Shopping in 1999. The company subsequently sold its remaining retail operations to Lotte Shopping and E-Land, retaining only the Ilsan location.
The store’s decline is reflected in its recent performance, with sales dropping 32% to approximately 18 billion won last year – merely a quarter of the revenue generated by the recently closed Lotte Department Store Masan branch, which recorded 74 billion won in sales before its closure.
Industry sources indicate that Venue G plans to convert the property into a wedding hall following shareholder approval at next month’s meeting. The company had already discontinued its online shopping operations in June and disbanded the division in August.
Analysts suggest this closure reflects a broader trend of market polarization in South Korea’s retail sector. While the country’s top five department store chains (Lotte, Shinsegae, Hyundai, Galleria, and AK) generated combined sales of 39.62 trillion won last year through their 70 locations, half of this revenue came from just 12 stores with annual sales exceeding 1 trillion won each.
The restructuring of smaller regional department stores has accelerated. Daejeon’s SAY Department Store ceased operations in May after being sold to Woori Asset Management. NC Department Store’s Busan branch also closed the same month following failed lease negotiations.
Both properties are slated for mixed-use development. Meanwhile, Daegu Department Store, a regional institution, closed its main branch in 2021 after 52 years and is currently up for sale.
Even major corporations are affected by this trend. Lotte Department Store, which operates the largest number of branches nationwide, closed its Masan location in June and plans to restructure 10 underperforming stores over the next two to three years.
“Department store sales are expected to decline by 1.7% next year,” said Kim In-ho, vice chairman of Business Insight. “We anticipate continued restructuring across the industry, particularly affecting regional department stores.”
Ashley Song (ashley@koreabizwire.com)
