[Edaily Reporter KYUNG GYEYOUNG ] Kim Dong-seon, President of Future Strategy at #Hanwha Machinery & Service Holdings (Hanwha M&S) and head of Hanwha Group’s Tech & Life Division, is restructuring the life business to focus on the “high-end” market. While pushing forward with the sale of the Galleria Time World branch, the company is accelerating projects such as the reconstruction of the Apgujeong Galleria Luxury Mall and the remodeling of “The Plaza” into a 7-star hotel, aiming to “select and focus” on its business portfolio.

According to industry sources on the 17th, HANWHA GALLERIA(452260)is proceeding with the sale of the Daejeon Time World branch. In this regard, HANWHA GALLERIA recently announced its plan to transfer the Time World branch through official letters to the labor union and employee briefings.

Although HANWHA GALLERIA’s official stance is that “nothing has been decided yet,” it is reportedly coordinating with LOTTE SHOPPING CO., LTD.(023530)on the terms of the sale. Unlike in 2021, a full sale—rather than a “sale and lease-back” arrangement, in which the land and building are sold and then leased back—is said to be the most likely option.

The Time World branch, located in Dunsan-dong—an area densely populated with the Daejeon Government Complex, City Hall, and large-scale apartment complexes—was the department store with the highest sales in the Chungcheong region. With annual sales of around 700 billion won, it was the second-highest-grossing branch within the Galleria group, trailing only the Apgujeong Luxury Store.

However, the situation changed after Shinsegae Co.,Ltd. Art & Science opened on the site of the former Daejeon Expo grounds in 2021. When major luxury brand Louis Vuitton opened a store at Shinsegae Co.,Ltd Art & Science, sales at the Time World branch took a direct hit; moreover, even in the jewelry and watch categories—which have recently become the main drivers of luxury consumption—the Time World branch (4 stores) has ceded the lead to Shinsegae Co.,Ltd Art & Science (18 stores). Looking at last year’s sales figures, Shinsegae Co.,Ltd surpassed 1 trillion won, while sales at the Time World stores shrank to 603 billion won, widening the gap even further.

This sale is interpreted as a strategic move to focus on the high-end market. President Kim Dong-seon, who began his true test of standing on his own with the launch of Hanwha M&S last month, is building a business portfolio centered on the high-end segment. In the case of the Galleria Time World branch, whose competitiveness has already weakened, it appears the plan is to use the proceeds from the sale to invest in showcasing Hanwha’s unique high-end offerings. HANWHA GALLERIA Time World’s total assets approached 300 billion won as of the end of last year.

Hanwha M&S’s restructuring has already begun. Starting next year, Galleria plans to invest approximately 900 billion won in the reconstruction of its Apgujeong luxury store alone, and it intends to develop a high-end residential complex on the “The Peak Dosan” site in Gangnam-gu, Seoul, which it acquired last month. Hanwha Hotels & Resorts, the other pillar of the group, has a strategy to transform “The Plaza” in Jung-gu, Seoul, into a 7-star hotel through a renovation. In the F&F sector, while pursuing the sale of the U.S. hamburger brand Five Guys, the company is focusing on growing its premium ice cream brand “Benson.”

An industry insider noted, “In the case of the Apgujeong luxury department store, since HANWHA GALLERIA is striving to maintain its leadership position, it appears to be pursuing a strategy of ‘selective focus,’” adding, “Since Hanwha M&S was launched last month, efforts to strengthen business competitiveness have begun in earnest.”