Lotte Duty Free sales leap 20% on Japanese surge

Dermot Davitt

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Sales at Hotel Lotte Duty Free Shop stores are set to end the year 20% up on 2003 as returning Japanese traffic and strong sales to local South Koreans boost the company's performance

Lotte executive director Young-Soo Choi told RavenFox.com: "We've had a double impact. The Japanese have returned and are spending with renewed confidence, plus we've had increases among Koreans too. Of the major brands, Louis Vuitton and Chanel have been stable, but there have been big increases in sales of Coach and Hermès during the year. Of the other categories, cosmetics has grown strongly."

To take further advantage of the growth in cosmetics, Lotte opened a new 660sq m (7,100sq ft) cosmetics area on the ninth floor of the main Hotel Lotte location in downtown Seoul 10 days ago. It is double the size of the previous area. Also in Seoul, Lotte last week re-launched Tiffany through a new stand-alone boutique, having previously discontinued the brand. Lotte has also just opened a Bottega Veneta store in the same location. Choi described the brand, part of the Gucci Group, as "a niche brand with great potential for duty-free".

Lotte also plans to open a Tiffany store at Seoul Incheon airport in the new year, and plans new openings for Coach and Gucci. Choi forecast 10% sales growth for Lotte's duty-free division in 2005.

Choi said that the resumption of flights between South Korea and Taiwan, after a 12-year hiatus, would have little beneficial effect on Hotel Lotte. "The Taiwanese who travel here aren't true duty-free customers," he said. "They buy mainly Korean souvenirs so we don't expect the resumption of flights to have a big impact."