Shinsegae Inc.’s Gangnam Department Store topped 3 trillion won ($2.3 billion) in annual sales as of Wednesday, becoming the first domestic department stores to hit the 3 trillion won mark.

According to industry sources on Thursday, sales at Shinsegae’s Gangnam branch for 2023 increased by approximately 5 percent compared to the same period in 2022, surpassing the 3 trillion won mark on Wednesday. The Gangnam branch’s annual sales exceed 1 trillion won in the shortest period in a decade since its opening in 2000. In 2019, it surpassed 2 trillion won in annual sales, also a first among domestic department stores, and crossed the 3 trillion won threshold four years after that achievement.

According to the company, getting to the 3 trillion won mark requires selling approximately 230,000 won per second based on a 10-hour business day, with the sales per square meter of business space at the Gangnam store at around 180 million won. Achieving annual sales of 3 trillion won for a single store is a rare case even internationally and only a few stores, including Harrods Ltd.’s department store in London and Isetan Mitsukoshi Holdings Ltd.’s Isetan Shinjuku have achieved the feat with approximately 3.64 trillion won and 3.16 trillion won in sales for 2022 respectively.

Despite the economic slowdown, VIP customers played a significant role in the record-breaking sales this year. VIP customers accounted for 49.9 percent of the purchasing customers at the Gangnam store, significantly higher than the 35.3 percent for all the Shinsegae branches combined. The concentration of high-income households in the adjacent area contributed to securing VIP customers.

Thanks to the influx of residents in the nearby apartments, the living category at the Gangnam branch grew by 35.7 percent in 2023, and the strategic focus on attracting customers in their 20s and 30s also significantly contributed to the sales growth. Among the customers who visited the Gangnam store this year, 40 percent were under 30, and those in their 20s accounted for 10 percent, meaning around half of the year’s new customer sales came from customers in their 20s and 30s.

The Gangnam store plans to unveil the nation’s largest food section, covering an area of 19,800 square meters, in 2024 after its first renovation in 15 years.

Shinsegae’s Centum City store, which ranked fourth in annual sales for individual department store branches in 2023, is also expected to surpass 2 trillion won in annual sales this year, becoming the first regional store to hit the 2 trillion mark.

According to the industry, four stores among the country’s five top department store chains’ 70 stores are forecast to surpass annual sales of 2 trillion won in 2023: Shinsegae Gangnam store, Shinsegae Centum City store, Lotte Shopping Co.’s Jamsil department store, and Lotte’s Myeongdong department store in central Seoul.

By Lee Hyo-seok and Chang Iou-chung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]