By Kwon Mee-yoo
A Myeong-dong branch of cosmetic brand Nature Republic, situated on the most expensive plot of land in the country, has failed to renew its lease and may be in the process of moving out or being evicted.
Just some 60 meters away from Myeong-dong Station on subway line No. 4, the Myeong-dong World branch of Nature Republic is one of the largest in the city with a floor accommodating only foreign customers. Since opening in 2009, the store has acted as the main store of Nature Republic, with posters of models such as Rain and JYJ on the front of the building.
The spot has been the most expensive site in Korea for eight years in a row. In 2011, the site was worth 215 million won per 3.3 square meters, a 4.3 percent jump from the previous year.
Nature Republic has six shops in Myeong-dong, but the World branch is the largest and the most popular. The company uses all five floors of the building for a monthly rent of 150 million won with a 3.2 billion won deposit. The sky-high rent is worth it as the branch sells about 1.1 billion won of product a month, which is about 10 percent of the brand’s overall sales.
The lease between Nature Republic and the landlord will expire in June, but Nature Republic has not renewed the lease yet. If negotiations fail, the top spot could be turned over to another brand.
"We are negotiating the renewal of the contract and details will be announced later in April," a Nature Republic spokeswoman said.
Though Nature Republic is one of the newest cosmetics brands and smallest in terms of sales, it has grown faster than any other, reaching some 80 billion won in sales last year, a jump of 67 percent from the previous year.
The Myeong-dong World branch is important to Nature Republic in both symbolic and financial ways.
However, the real estate industry is negative toward the extension of the contract.
Previously, java chains such as Starbucks and Pascucci occupied the spot. Starbucks opened its fourth branch in the building in 2000 and the Myeong-dong branch has been a foothold for settling in Korea. In 2004, Korean coffee shop brand Pascucci took over the space and expanded its business, but did not extend the lease.
"The landlord of the building has never renewed a contract with any of his tenants and he is likely to welcome a new tenant for higher rent," a realtor covering Myeong-dong said. “Tourists from Japan and China swarmed into Myeong-dong in the 2000s and incited the rent to skyrocket. There is no doubt that the rent will soar again.”