Hyundai Department Store (069960) Investor presentation summary

Background

• Profitability of city duty-free stores has declined due to shifts in the market environment and intensified competition.

• Economic downturn in China and changing travel trends have reduced demand, especially for cosmetics.

• The rise of patriotic consumption in China has further weakened demand for key product categories.

Key strategies

• Operational efficiency will be improved by consolidating city duty-free operations at the Trade Center branch and closing the Dongdaemun branch.

• High-profitability brands will be relocated to the Trade Center, while low-efficiency merchandise will be downsized.

• Focus will shift to domestic customers and luxury offerings, leveraging recent growth in the luxury segment.

• Enhanced bargaining power with Daigou resellers is expected due to reduced competition.

• Airport duty-free stores will reinforce merchandise with high-efficiency luxury brands, targeting over 10% YoY sales growth in Q1 2025.

Planned schedule

• Merchandise restructuring will occur from April to July 2025, followed by the grand opening of the Trade Center branch in August.

• Dongdaemun branch will close, with brand notifications, negotiations, and relocations scheduled throughout the transition period.

• Exclusive operation of the Trade Center branch will begin in August 2025.