Controversies rise regarding Lotte's new branch
Illustration of an outdoor area at Lotte Department Store Dongtan in Hwaseong, Gyeonggi Province / Courtesy of Lotte Shopping
Retailer fails to launch Louis Vuitton, Chanel boutiques
By Kim Jae-heun
It has only been three days since Lotte Department Store opened a new branch in Dongtan, part of the largest shopping mall in Gyeonggi Province, but it is already embroiled in a number of controversies.
Lotte said a security guard at the store tested positive for COVID-19. He had worked there for three days from Aug. 18 to Aug. 20 in front of the department store's entrance. No additional cases are confirmed yet, but Lotte is planning to test all workers at the store for the virus.
Restaurants and coffee shop owners in the town have already expressed concerns regarding the large crowds at the department store on the first day of its grand opening.
Lotte Department Store's Dongtan branch has also been criticized for its similar interior design to that of Hyundai Department Store's The Hyundai Seoul in Yeouido that opened in February. Some visitors at Lotte's new store said they instantly thought of The Hyundai Seoul when they entered the building.
It turned out that a Canadian firm Burdifilek had participated in both projects for the interior design of both Lotte and Hyundai's stores.
Lotte acknowledged that adopting a large void in the middle of the building with white color walls and floor designed in circular shapes is the global trend and people can naturally think that its new branch's interior design looks similar to that of The Hyundai Seoul.
Dongtan branch fails to launch popular luxury brands
Lotte's Dongtan branch has not yet opened any shops of Louis Vuitton, Chanel or Hermes, which are the three most popular luxury brands in Korea.
The three French boutiques are a must for retailers looking for high revenue and to attract a large number of customers to their stores.
Other locally favorite luxury brands like Christian Dior, Bottega Venetta and Gucci also did not open boutiques at the Dongtan store.
Lotte Shopping, operator of Lotte Department Store, said it is in negotiations with various luxury firms. Louis Vuitton is reportedly at the top of its list.
“We don't know when we will have Louis Vuitton, Chanel or Hermes stores open at our Dongtan branch but we are in talks with them. Many luxury brands believe that apart from Seoul and Busan, the purchasing power of customers in other local cities is low,” a Lotte Shopping official said.
In general, the three French firms limit the number of boutiques they operate in a country. The only department store in Korea to offer Louis Vuitton, Chanel and Hermes stores on its opening day was Shinsegae Department Store in Busan. There are only seven department stores here that have all three brands.
The brands also prefer to see the business performance of a department store before opening their stops there.
Louis Vuitton boutique at Shinsegae Derpartment Store in Gangnam, Seoul / Courtesy of Shinsegae Department Store
Hyundai Department Store in Pangyo, the main rival of Lotte Department Store in Dongtan, opened a Louis Vuitton boutique in four months after making its grand opening.
Hyundai Department Store surpassed 1 trillion won in sales in the shortest period of five years proving its capacity. It is reportedly in talk with Chanel to launch its stores and Hermes will open its boutique in next year.
Currently, Lotte Department Store Dongtan offers Fendi, Dolce & Gabbana, Alexander McQueen, Valentino and Balenciaga. Prada and Burberry is running a pop-up store and Saint Laurent and Tom Ford will open boutiques there soon.
“We have focused on launching luxury brands that millennials like and they can afford,” the official said.
Shinsegae is also opening a new department store in Daejeon on Aug. 27 and it has no plans for any Louis Vuitton, Chanel or Hermes boutiques at its store, though it will launch Christian Dior upon its opening.
Meanwhile, Lotte Department Store Dongtan is already being visited by a number of customers from the local area and farther away. Restaurants and coffee shops at the department store, which takes 28 percent of the whole building, were all full last Thursday. American fast food hamburger chain Shake Shack opened its first Dongtan location and people formed a long queue during lunch time.
The expectations on the Lotte Department Store branch there are big for many businesses including Dolce & Gabbana, which operates only one boutique in a department store in Gyeonggi Province.