Slump forces department stores to extend sales

By Park Si-soo

Reduced private consumption due to tightened purse strings is spurring the country’s three largest department stores to extend the summer sale period. Attempting to attract more consumers the boundaries between them and discount chains are now blurring.

Starting Thursday, the three ― Lotte, Shinsegae and Hyundai ―will hold summer sales for as long as 40 days, the longest sale in the country’s retail history and nearly double the period of previous years. With aims to energize domestic consumption several mid-sized department stores have already switched into “dumping” mode.

The country’s largest department store chain Lotte said it started selling nearly 70 percent of brands at discounted prices from Friday and that this will continue until the end of next month. Shinsegae and Hyundai have the same summer sale policy, selling a majority of brands including some luxury clothing brands, imported wines, and shoes, at up to 80 percent lower prices.

This unprecedentedly long summer sale comes at a tough time for major department stores currently suffering a record low growth in sales amid deepening financial crisis in eurozone and ensuing frozen consumption in the local market, analysts said.

The department store industry posted less than one percent of growth in sales last year.

The increased stock of products has made it difficult for companies to bring in new products for the autumn-winter seasons, a key motivation for the longest summer sales taking place at major department stores, they said.

“We will try hard to sell (products) as much as possible in order to give our suppliers more room to make goods for the next season,” said Hwang Bum-seok, senior manager of Lotte Department Store. “To that end, we will host a variety of discount events to catch the attention of price-conscious consumers.”

Lotte will kick off a special discount session for the country’s most sought-after clothing brands, including Galaxy, Bean Pole and Rogadis, between July 4 and 8 at its five chains. The company will release merchandise valued at 20 billion won to be sold at discounts of up to 60 percent.

Shinsegae will sell women’s clothing and handbags at 30 percent off, men’s wear at 20 percent off as well as golf and other sports wear at up to 30 percent discounted prices. Meanwhile, Hyundai said more than 700 brands will be on sale ranging from 10 to 40 percent.