South Korean retail giant Shinsegae on Thursday announced plans to renovate its landmark outlet, one of the oldest buildings in central Seoul, into a duty-free shop in what could be its latest effort to win a highly competitive bid to run duty-free stores in downtown Seoul.

Some six consortiums and companies, including Lotte Duty Free, Hotel Shilla and Hyundai Department Store, are reportedly preparing to take part in an upcoming bid for duty-free store operational licenses in downtown Seoul.

The country's customs office plans to receive applications by June and announce two winners in the following month. It will hold a separate bid for small and medium enterprises.

The bid is seen as a major opportunity for local retailers who are in search of new profit sources amid lackluster domestic demand. Duty-free stores have emerged as one of the most lucrative retail channels in tandem with a sharp influx of deep-pocketed shoppers from China.

In a press release, Shinsegae said it will submit a bid to the customs office for duty free shop operations, with plans to open an

18,180 square-meter duty-free shop in the historic building that is currently used as a Shinsegae Department Store branch. The building, established in 1930, was home to the country's first department store.

The retail conglomerate said the building's location near Myeongdong, one of the capital's most popular destinations for overseas visitors, is a major advantage that will help enhance shoppers' convenience, as well as boost the local tourism and retail industry.

If Shinsegae wins one of the two licenses, it will be opening its first duty-free store in downtown Seoul. It currently only operates an online duty-free shopping service.

In 2014, the six duty-free stores across the capital, mostly dominated by Lotte, posted a combined sales of 4.4 trillion won ($4 billion). Sales by a Lotte Duty Free branch in the Myeongdong area accounted for a whopping 45 percent of the total.

Shares of Shinsegae closed up 9.35 percent at 251,500 won on Thursday, while the benchmark KOSPI gained 0.29 percent. On Wednesday, Shinsegae shares surged 10.31 percent. (Yonhap)