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SM Duty Free to withdraw from Incheon Int'l Airport over pandemic-caused losses

All News 17:59 July 06, 2020

SEOUL, July 6 (Yonhap) -- SM Duty Free, a mid-sized duty-free operator, said Monday it will withdraw its outlets from Incheon International Airport, the country's main gateway west of Seoul, next month due to business setbacks caused by the new coronavirus.

The decision may spur similar moves by other major duty-free operators suffering from an industry-wide slump as licenses to run duty-free shops at the No. 1 terminal of the airport will expire next month.

Only a few customers are spotted at duty-free stores at Terminal 1 of Incheon International Airport, west of Seoul, in this photo taken May 15, 2020. (Yonhap)

"Taking into account the number of airport users and the government's policy, we think that business situations will continue to deteriorate," Kim Tae-hoon, CEO of SM Duty Free, said in a statement.

"We will withdraw the duty-free stores from the Incheon International Airport on Aug. 31," he added.

South Korea's duty-free operators face a slump as the COVID-19 pandemic has disrupted air travel.

Duty-free stores saw their combined sales fall below the 1 trillion-won (US$837 million) mark for the first time in four years in April, according to industry data.

Lotte Hotel and Hotel Shilla, the country's leading operators of duty-free shops, may follow suit, depending on progress over talks about lease fees with Incheon International Airport Corp. (IIAC), the operator of the country's main gateway.

Through a bid in March, IIAC picked Lotte Hotel and Hotel Shilla to run sections selling liquor and tobacco in the No. 1 terminal. But they gave up the license in April as the pandemic caused sales to decline.

IIAC has requested the two major operators to consider extending their operations, but Lotte Hotel and Hotel Shilla have called for a sharp cut in lease fees.

This photo, taken May 27, 2020, shows duty-free shops at Incheon International Airport, South Korea's main gateway west of Seoul, where the number of customers has sharply fallen amid the COVID-19 pandemic. (Yonhap)


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