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Shinsegae ups presence in hotel business with launch of L’Escape
The retail giant‘s focus in hotel biz expected to create synergy with its shopping networksBy Kim Da-sol
Published : July 25, 2018 - 16:07
The country’s 10th-largest conglomerate by assets launched last week its first standalone boutique hotel brand L’Escape in Myeongdong, Seoul.
The opening of the new hotel is in line with Vice Chairman Chung Yong-jin’s pursuit to upgrade Shinsegae’s brand image with hotel business, especially targeting consumers in their 20s to 40s.
Operated by Shinsegae Chosun Hotel, the new hotel is the latest addition to the hotel network under Shinsegae Group. There are currently Westin Chosun and Four Points By Sheraton hotels run under Shinsegae Chosun Hotel in Korea. Chung’s sister Yoo-kyung, president of Shinsegae Department Store, has been preparing to open JW Marriott Seoul next month.
Inspired by 19th-century French interior decor, L’Escape was designed by a French architect Jacques Garcia under a theme of a “Parisian Escape in the heart of Seoul.” The 25-story building is filled with 204 rooms, a modern Chinese restaurant, a contemporary restaurant, a tea salon, a coffee station, a rooftop bar and other facilities.
“The reason we launched a boutique hotel, instead of a high-end luxury hotel brand, is that we wanted to create an unprecedented hotel that can lead consumers’ lifestyle,” said Lee Yong-ho, a president of Shinsegae Chosun Hotel.
“Starting with L’Escape, we would like to launch five more hotels in the next five years, which can provide a variety of content and new lifestyles,” he added.
Until separating Shinsegae duty-free from Shinsegae Chosun Hotel in June, the group’s performance in hotel biz was insipid.
Last year, Shinsegae Chosun Hotel recorded 700 million won ($620,000) of operating profit, about 1/8 of the amount it achieved in 2016.
Its rival Hotel Shilla has been posting an upward graph. Hotel Shilla earned 400 million won in operating profit in 2016 and 14.6 billion won in 2017.
“(After seperating the duty-free business), we can now focus on hotel business. We will firstly work on solidifying our profit structure,” said a Shinsegae official.
In 2012, Shinsegae widened its business portfolio from department store to hotel by acquiring a 60 percent stake in Central City, a multicultural complex located in Banpo-dong, Gangnam.
Industry insiders viewed that Shinsegae’s focus in hotel biz will create synergy with other retail arms of the group. According to the L’Escape, its rooms will be supplied with various promotional products sold in retail brands of Shinsegae.
Meanwhile, local media outlets reported that Vice Chairman Chung’s eldest son Hae-chan has begun his internship at Westin Chosun Hotel.
The 20-year-old Chung is one of 37 students who are participating in Westin Chosun’s summer internship. Chung currently studies Hotel Administration at Cornell University in US.
Last week, E-Mart, which is under the direct management of Vice Chairman Chung, purchased 168,814 shares in Shinsegae Chosun Hotel from Shinsegae Chairwoman Lee Myung-hee for 2.87 billion won.
The deal raised E-Mart’s stakes in the hotel unit to 99.87 percent and leaving none for Lee, in an apparent move to facilitate succession to Chung for his grip over the retail conglomerate through E-mart.
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