Shinsegae Duty Free is considering closing its branch in Haeundae District, Busan, following weak sales and the exodus of major brands.
A spokesperson for Shinsegae DF, the operator of Shinsegae Duty Free, said that the branch, located in Shinsegae’s Centum City Mall, is considering handing in its license to operate a tax-exempt business but that its closure is not yet confirmed.
Many vendors left the store last year, and a lack of personnel and decrease in tourism to the seaside Haeundae area and downtown Busan have negatively affected sales, the spokesperson told the Korea JoongAng Daily on Tuesday.
The Busan store is currently permitted to run through February 2026. The company must negotiate with customs to cancel the permit.
The potential closure comes amid a widespread crisis in Korea's duty-free industry in Korea as high-spending Chinese group tourists peter out and the won hovers around a historic low. Korea’s four largest duty-free shops — Lotte Duty Free, Shilla Duty Free, Shinsegae Duty Free and Hyundai Duty Free — all posted losses in the third quarter of 2024.
Shinsegae Duty Free started accepting voluntary resignations in November for the first time since the company was founded in 2015. The Busan store eliminated 25 percent of its operating space the same month and reduced its operating hours from seven days a week to five after some of its employees took the buyouts.
Lotte and Shilla also slimmed down their workforces in 2024.
A worker’s union for duty-free shops broke the news of the potential closure on Monday. Shinsegae told brands through a notice on Dec. 30 that all employees could be dismissed by Jan. 2 but did not provide an exact closure date, according to the Korean Department Store and Duty Free Shops Sales Service Worker’s Union (KOSU).
The union held a rally in front of Shinsegae Department Store’s main branch in Jung District, central Seoul, on Tuesday demanding better severance packages for employees of Shinsegae’s partnered brands. Around 50 members, many of them sales employees of cosmetic brands, were set to gather, according to Yonhap News Agency.
“Shinsegae Duty Free offered voluntary resignation packages to full-time workers employed by the company but said nothing was confirmed for partnered company workers,” the union said, asking that Shinsegae “fulfill their employment responsibilities” to the contracted workers.
Shinsegae is monitoring the situation but does not have the authority to dictate partnered brands' employment policies, Shinsegae Duty Free's spokesperson said.
