Hanwha Galleria has begun the process of selling its Time World Store. The Time World Store recorded total sales (transaction value) of 603.2 billion won last year, making it the second most profitable store among the five nationwide stores operated by Hanwha, following the Apgujeong Luxury Hall. This move is seen as a strategic step by Kim Dong-seon, the third son of Hanwha Group and future head of Hanwha M&S Holdings (HanwhaM&S), with an eye toward restructuring the retail business and diversifying its operations.
According to industry sources on the 17th, Hanwha Galleria Time World, a subsidiary of Hanwha Galleria, sent an official letter to the union on the 11th stating that it would begin discussions on transferring the Time World Store and held an employee briefing session.
The Galleria Time World Store is operated by Hanwha Galleria Time World. It originally opened as Dongyang Department Store in 1997, but was acquired by Hanwha Distribution, the predecessor of Hanwha Galleria, in 2000, at which point its name was changed to Time World Store.
Industry observers estimate that the expected sale price for the Time World Store could approach 1 trillion won. Potential acquirers include competitor Lotte Shopping and real estate developers.
Lotte Shopping has been operating its Lotte Department Store Daejeon branch since 2000 in a competing commercial area. Last year, sales at the Lotte Daejeon Store reached 212.6 billion won, about one-third of the Time World Store's figure. The fact that it is a leased store rather than an owned property also factors into its consideration as a potential acquisition target. However, some analysts suggest that Lotte Shopping is unlikely to choose the "risky" path of discontinuing operations at its Daejeon Store and acquiring the Time World Store, given its focus on investing in large-scale stores in Seoul and the metropolitan area, including its Jamsil branch.
Another concern for potential acquirers is that total sales at the Time World Store peaked at a record 740.7 billion won in 2021 but have since declined to the mid-600 billion won range starting in 2023. This trend is closely linked to the fact that competitor Shinsegae opened Daejeon Shinsegae Art&Science in Yuseong-gu, Daejeon, in 2021, which surpassed 1 trillion won in total sales last year, just four years after opening, by leveraging luxury brands such as Louis Vuitton.
Additionally, given the recent slowdown in offline stores and the growing trend of developing mixed-use residential-commercial complexes rather than expanding commercial facilities on sites slated for sale from department stores or shopping malls, some opinions suggest that a real estate developer is more likely to pursue an acquisition than a retail company.
If the Time World Store is sold, Hanwha is expected to heavily invest the proceeds in rebuilding the Galleria Luxury Hall. The West and East buildings of the Galleria Luxury Hall, located in Apgujeong-dong, Gangnam-gu, Seoul—a prime location—are aging, having been constructed in 1979 and 1985, respectively. With a sales area of 8,300 pyeong (27,438 square meters), the facility occupies only about 30% of the space of the nearby Shinsegae Department Store Gangnam branch, and its parking lot is extremely cramped.
Hanwha Galleria plans to completely demolish the existing buildings and create new underground spaces through a comprehensive reconstruction project, aiming to more than double the sales area of the Luxury Hall to 18,000 pyeong (59,504 square meters).
Last year, total sales at the Galleria Luxury Hall reached 1.1513 trillion won, ranking 12th among all department store branches nationwide. With the completion of full-scale reconstruction and strengthened luxury brand offerings, it is expected to surpass the 2nd trillion won mark in total sales, placing it on par with major competitors' flagship stores such as Shinsegae Gangnam, Lotte Jamsil, and Hyundai Pangyo. Considering the progress of permitting procedures and construction timelines, completion is projected for sometime between 2032 and 2033.
In this scenario, while the number of stores operated by Hanwha Galleria will decrease from five to four, department store business sales could actually increase. This signifies that the success or failure of Kim Dong-seon's solid management strategy, which emphasizes concentrated investment and operational efficiency over store expansion, will be determined.
Meanwhile, Hanwha Galleria has recently been expanding into new business areas beyond food and beverage through real estate development. In June, it acquired the Sunhwa Building and land on Seosomun-ro in Jung-gu, Seoul, for 213.5 billion won, and in July, purchased land in Sinsa-dong, Gangnam-gu, Seoul, for 236.7 billion won.
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