Department stores abroad are collapsing. Why are they flying high in Korea?

Customers queue for Dubai chewy waffles at the Lotte Jamsil in Southern Seoul on Jan. 18 [CHO YONG-JUN]

 
From Saks Fifth Avenue and Macy’s in the United States to Germany’s Galeria, major department store chains around the world are grappling with mass closures or bankruptcies, squeezed by the relentless rise of e-commerce. But step onto the floors of a Korean department store, and the picture flips entirely — bustling food halls, luxury boutiques packed with shoppers and pop-up stores drawing snaking lines tell a very different story.
 
Before lunchtime on Friday, a Dubai chewy cookie pop-up shop at Lotte Department Store in Sogong-dong, central Seoul, was already sold out. By 2 p.m., it had stopped accepting customers altogether. On the same day, a Cartier store at The Hyundai in Yeouido, Western Seoul was fully booked, while at Shinsegae Department Store in central Seoul, staff at the Chanel and Hermès boutiques managed waiting crowds with their tablets, guiding customers as queues formed outside.
 
The country’s three major department stores — Lotte, Shinseagae and Hyundai — are expecting double-digit growth in operating profits in the fourth quarter of 2025 compared to the same time the previous year, according to market tracker FnGuide. The department store industry as a whole also saw revenue increase by 12.3 percent in 2025 compared to the previous year, according to data from the Ministry of Trade, Industry and Resources, while other retail types, such as supermarkets and convenience stores, posted growth of less than 1 percent.   
 
At the heart of the robust growth are flagship branches located in Seoul. Shinsegae Department Store’s Gangnam branch and Lotte Department Store’s Jamsil location, both in southern Seoul, have both surpassed 3 trillion won ($2.03 billion) in 2025, faster than they did in the previous year. The Hyundai department store in Yeouido, in western Seoul, logged 100 million customers in just two and a half years since its opening in 2021.
 

A Pokemon pop-up event held at Lotte Jamsil in southern Seoul in 2025 [LOTTE SHOPPING]

Pop-ups pull in Gen Z, tourists
While luxury brands are the primary driver of revenue growth, trendy pop-up stores are helping bring in foot traffic, keeping department stores not just relevant, but even ahead of the curve in setting trends.
 
The global popularity of K-pop has worked in favor of limited-run pop-up stores themed around idol stars, attracting foreign tourists — a customer group that has traditionally fallen outside the core department-store demographic.
 
“I first visited The Hyundai to visit IVE’s pop-up store, so I came here to see if there was a similar pop-up at The Hyundai now,” said Wayne, a 20-something visitor from Hong Kong. Wayne didn’t come to The Hyundai with a specific pop-up event in mind; he knew the department store likely had one every day. 
 
“I don’t really go to the department stores in Hong Kong — there’s nothing interesting for people my age,” he said.
  
The Hyundai, at the time, had a Harry Potter pop-up event that sold magic wands, clothes and other film-inspired merchandise. The event also featured photo zones, allowing fans and families to dress up as movie characters for photos. Less than a week later, the same area changed into an EXO pop-up celebrating the boy band’s eighth full-length album.
 
In fact, there were 30 total K-pop pop-up events held at The Hyundai in 2025 alone, including G-Dragon, IU and even virtual boy band Plave. 
 
Such pop-up events, held regularly at department stores, have become a new attraction for the younger generation and foreign tourists, giving them new reasons to visit brick-and-mortar stores. At The Hyundai Seoul, 20 percent of its total transactions reportedly come from foreigners, while Lotte Jamsil and Shinsegae Gangnam both reported a doubling of foreigner transactions in recent years. 
 
“I honestly don’t go there [Macy’s or Nordstrom] much; I’ve bought stuff before, but that’s not my main place to shop. This day and age, online is pretty good and I can usually find stuff cheaper online,” said Jae, an American tourist visiting Korea for the winter break.
  
“I go to Shinsegae and Hyundai Department Stores when I visit Korea to look at the Korean brands and pop-up events,” they said.  
 

Christmas market at Lotte Jamsil in southern Seoul [LOTTE SHOPPING]

 
Lotte’s Christmas Market, which just closed a couple of weeks ago, also represents the trend. The Lotte Town Christmas Market was a limited-run outdoor event, similar to the winter wonderland Christmas fairs in Europe, located just outside the Lotte World Tower & Mall in Songpa District, southern Seoul. 
The roughly monthlong market drew 45,000 visitors, according to Lotte Shopping. While the market, free to enter during off-peak hours and costing just 5,000 won at night — when the lights are illuminated — is unlikely to have generated meaningful profit for the company, it shows that department stores are attracting more young customers to brick-and-mortar locations.
  

A pop-up store at the Lotte Jamsil in southern Seoul [CHO YONG-JUN]

 
There was also a sizable pop-up event for cute keyrings and plushies when the reporter visited Lotte Jamsil on Sunday. The Greenlight x Mild Muumuu pop-up at the center of the mall’s first floor had many young customers and couples there to have a look at the wide range of toys and accessories at the store, including Kang Hanna, a 25-year-old who was interested in the mechanical keycap keyring shaped like a bunggeoppang, a fish-shaped pastry and iconic Korean wintertime treat.
 
“I go to department stores a couple of times a month, but I don’t visit them with specific brands or clothes in mind; I just go there to look around and discover new things,” Kang said.
  
Fancy, flashier and ‘VIP’ customers 
 
Department stores are also focusing heavily on the other end of the spectrum, luxury. Over 36 percent of department stores’ total revenue came from luxury designer brands.
 
“Stores like Chanel, Hermès and Bottega Veneta always garner lines, and clients should register,” a spokesperson at Shinsegae Department Store said.  
 

A kiosk at the Cartier store in The Hyundai Seoul in western Seoul shows that the reservations required to enter the store have been booked out. [CHO YONG-JUN]

 
In fact, a whopping 46 percent of Lotte Department Store and Hyundai Department Store’s yearly revenue came from so-called VIP customers, while 47 percent of Shinsegae’s revenue came from its VIP customers, according to each department store. VIP customers. 
 
While there are different levels of VIP customers, the VIP title is usually given to customers who spend more than 10 million won every year. The top-tier VIP level usually requires annual purchases of 100 million won or more. 
 
The top three luxury brands, Hermès, Louis Vuitton and Chanel, reported 4.6 trillion won in revenue in Korea alone in 2024, with the figures expected to rise for 2025. Chanel alone is expected to surpass 2 trillion won in revenue in Korea in 2025, according to industry speculations. 
 

Shinsegae Department Store’s The Heritage building in Jung District, central Seoul [SHINSEGAE]

 
Shinsegae, after purchasing the 90-year-old former Standard Chartered Bank Korea building next to its Myeongdong branch, renovated the entire building and opened it last year with the name The Heritage. The building, acting as an annex specializing in luxury brands, dedicates its whole first and second floors to Chanel, with the third floor still under construction.
 
The department store’s Gangnam branch — the highest-grossing department store location in Korea — also introduced the House of Shinsegae in 2024, a luxury food hall that operates separately from the existing food hall. The new area features pricey dishes such as Unadon, omakase sashimi and shabu-shabu. Shinsegae said the 13 restaurants in the House of Shinsegae recorded twice the average sales in the first half of 2025 compared to the previous year, while its foreign sales more than doubled.
 
But not all department stores are making 3 trillion won in revenue. There are a total of 17 department stores in the country with annual revenue of 200 billion won or less, and their combined revenue was less than half that of Shinsegae Gangnam and Lotte Jamsil.  
 
Lotte already closed its Masan branch in South Gyeongsang last year, while Hyundai is planning to shut down its D-Cube City branch in eastern Seoul next year. But some stores are getting a second chance with a new name and renovations: Shinsegae’s Gyeonggi branch in Yongin, Gyeonggi, changed its name to Shinsegae South City, and Lotte Department Store’s Suwon branch underwent a large-scale renovation, opening as Timevillas Suwon to combine the department store with Lotte Mall. 
 
“Shinsegae is growing through a ‘mega-scale’ differentiation strategy centered on spatial innovation,” a Shinsegae spokesperson said. “By breaking the stereotype that department stores are strictly for shopping, we are trying to redefine the customer experience.” 

BY CHO YONG-JUN [[email protected]]