What: South Korea's Grand Department Store announces the closure of its final outlet in Ilsan, marking the end of a retail chain that once dominated upscale shopping districts since 1971.

Why it is important: The end of Grand Department Store, once a prominent retail chain, highlights the challenges facing traditional department stores as they compete against both major luxury chains and changing consumer behaviours.

rand Department Store's last remaining outlet in Ilsan, Gyeonggi Province, will permanently close on February 28, concluding over five decades of retail operations in South Korea. Founded in 1971 by Venue G chairman Kim Man-jin, the company expanded significantly with its Gangnam location in 1986 before facing financial difficulties during the 1997 Asian financial crisis. The chain's decline is evident in its recent performance, with sales dropping 32 percent to USD 12.533 million last year, merely a quarter of the revenue generated by the recently closed Lotte Department Store Masan branch. Following shareholder approval, Venue G plans to convert the property into a wedding hall. This closure is part of a broader industry trend, with several regional department stores ceasing operations in 2024, including Daejeon's SAY Department Store and NC Department Store's Busan branch, while major chains like Lotte announce plans to restructure underperforming locations.

IADS Notes: The closure of Grand Department Store's last outlet in February 2025 exemplifies the increasing polarisation in South Korea's retail landscape. While the top five department store chains (Lotte, Shinsegae, Hyundai, Galleria, and AK) generated USD 27.5 billion in combined sales through their 70 locations in 2024, regional players have faced mounting pressures. This trend was particularly evident in 2024, with multiple regional closures including SAY Department Store in Daejeon and NC Department Store in Busan in May. Even market leader Lotte announced plans to restructure 10 underperforming stores, while accelerating asset sales amid financial pressures as reported in November 2024. The conversion of these former retail spaces into mixed-use developments, as seen with Grand Department Store's transformation into a wedding hall, reflects the broader industry adaptation to changing market dynamics, with analysts predicting a further 1.7% decline in department store sales for the coming year.

Korea’s Grand Department Store to close its last outlet