Shinsegae, led by Chairman Jung Yoo-kyung, will swiftly acquire the Lotte Department Store Busan Centum City store. It is expected to create a mega-scale 'Shinsegae Town' in conjunction with the existing Shinsegae Department Store Centum City store, Centum City Mall, and other facilities.
According to industry sources on Thursday, Shinsegae signed an asset purchase agreement for the Busan Centum City store with Lotte Shopping. The two companies submitted a business combination review application to the Fair Trade Commission on the same day for this transaction.
The Lotte Department Store Centum City store was built with 7 basement levels and 10 above-ground floors, covering a total floor area of 113,642 square meters. Of this, the sales floor area is approximately 36,000 square meters.
The Shinsegae Department Store Centum City store, combining its main building and the Centum City Mall opened in 2016, spans 4 basement levels and 14 above-ground floors with a total floor area of 293,904 square meters, already registered in the Guinness Book of World Records as the world's largest department store. Its sales floor area reaches 140,000 square meters.
Shinsegae Department Store explained that it plans to create a 'Shinsegae Town' by connecting the two buildings and developing an idle site (Centum City Site C) of approximately 20,000 square meters adjacent to Shinsegae Centum City store, aiming to cultivate it as a global landmark.
The company stated that this new acquisition and integrated operation will secure 'economies of scale' and lay the foundation for further enhancing operational efficiency.
After acquiring the Lotte Department Store Centum City building, Shinsegae plans to maintain the building's exterior while launching large-scale renovations of its interior facilities. It is also considering a plan to connect the above-ground sections of the two adjacent buildings. Since the subway station and entrances to both buildings are already connected, the connection of underground spaces is expected to proceed swiftly.
Shinsegae Co., Ltd. will oversee the acquisition cost of the Lotte Department Store Centum City store and investments in complex development. Last year, Shinsegae Centum City store recorded annual sales of 2.23 trillion won, ranking third nationwide after Shinsegae Gangnam store and Lotte Jamsil store. It is the only non-metropolitan regional store outside Seoul to join the '2 trillion won club.' Furthermore, if expanded into 'Shinsegae Town,' synergy effects are expected to push annual sales beyond 3 trillion won.
Park Ju-hyung, President and CEO of Shinsegae Co., Ltd., said, "This acquisition is significant in that it has created a business environment where both companies can develop further beyond competition." He added, "Taking this acquisition as an opportunity, we will develop Shinsegae Centum City into Shinsegae Town, where shopping, culture, tourism, and urban spaces are organically integrated, making it a core global landmark representing the Republic of Korea."
Meanwhile, Lotte Busan Centum City store opened in December 2007. It once surpassed annual sales (transaction volume) of 300 billion won, emerging as a key Lotte store, but after Shinsegae Centum City store opened at an adjacent location in March 2009, it fell behind in competition and its sales declined. Last year's annual sales dropped to the 120 billion won range, classifying it among the lower-performing stores operated by Lotte. Lotte has been pushing for store sales since last year from the perspective of asset efficiency.
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