SOUTH KOREA. The Shilla Duty Free has temporarily closed its downtown stores in Seoul and Jeju in response to the worsening coronavirus situation, The Moodie Davitt Report can confirm. Local reports say that a coronavirus-infected person was confirmed to have visited the Seoul flagship twice last month. [Source: Yonhap News].
“Sales have slumped in recent days as the situation has worsened,” a Korean travel retail veteran told The Moodie Davitt Report from Seoul this morning.
As reported, Lotte Duty Free has closed its Jeju downtown duty free store from today in order to prevent the spread of the coronavirus domestically.
The measure is necessary “for the safety of customers and employees”, Lotte said.
Lotte Duty Free confirmed that a Chinese customer who visited the store on 23 January and later returned to Yangzhou, China, had been confirmed subsequently with the coronavirus.
A Lotte Duty Free spokesperson told The Moodie Davitt Report this afternoon (3 February) Seoul time: “We are running other [non-Jeju] stores just fine, but we are experiencing a sales downturn. For the Lunar New Year break, Lotte Duty Free recorded a -30% year-on-year fall in average daily sales at our three Seoul downtown stores. Comparing to the same period in the previous week, Lotte posted a -30% fall as well.
“It will last way longer than we expected… things are not so good.”
The economic impact from the closure of Shilla’s stores in Seoul and Jeju and Lotte’s Jeju store will be heavy, writes The Moodie Davitt Report Senior Retail and Commercial Analyst Min Yong Jung.
2018 annual sales by store:
- Shilla Seoul KRW2,884 billion (US$2,620 million)
- Shilla Jeju KRW868 billion (US$788 million)
- Lotte Jeju KRW754 billion (US$685 million)
2018 average daily sales*:
- Shilla Seoul KRW7.9 billion (US$7.2 million)
- Shilla Jeju KRW2.4 billion (US$2.2 million)
- Lotte Jeju KRW2.1 billion (US$1.9 million)
[* annual sales divided by 365 days]
“Assuming stores are closed for 14 days, the economic impact from store closures (average daily sales multiplied by # of days stores are closed for) could be KRW172.8 billion (US$157.0 million),” said Jung.
Potential losses over a 14-day period
- Shilla Seoul KRW110.6 billion (US$100.5 million)
- Shilla Jeju KRW33.3 billion (US$30.2 million)
- Lotte Jeju KRW28.9 billion (US$26.3 million)