For four days 250,000 people visited Paju’s Shinsegae Chelsea... Smaller Outlets’ sales down 30 - 40 %

Business district ‘tottering’...”Securing foreign investment is taking the bread off our table”

In Paju, Gyeongi-do, Shinsegae Chelsea Outlet, attracted some 160,000 people to visit the weekend after opening 19th and 20th and achieved certain level of success. Compared to this, neighboring Deokidong located in West Ilsan, Goyang; Janggi-dong Outlet in Gimpo, as well as clothing retailers in Geumchon-dong, Paju didn’t have even half as many visitors as an average weekend. The concern over the downfall of the area’s small to medium sized businesses has been increasing.

When one puts together what interested parties from both Shinsegae and Gyeonggi North-western area outlets have said on the 21st, for the four days following the opening of Paju’s Shinsegae Chelsea on the 17th, 250,000 visitors were attracted to the store. This caused severe traffic jams on Freedom Highway and surrounding streets during the weekend. Contrarily appx. 14 km away, Deokidong Outlet took the hit and customer levels were 20% below average weekend levels. Its sales as well as the sales in stores in Goyang, Gimpo and the area around Geumchon were tentatively said to have dropped 30 - 40%.

As was worried with the construction of Paju’s Shinsegae Chelsea, the small and medium sized businesses north west of the capital have taken a large blow. Without any form of countermeasures, area businessmen have ignored Gyeonggi-do’s attracting investment into Shinsegae Chelsea and the Small and Medium sized Business Administration’s ‘Advice on the temporary stoppage of a business’ opening’, but strongly criticized Shinsegae’s enforcement of the opening. Until the results of the deliberations were released by the Business Arbitration Office, the Small and Medium sized Business Administration advised in temporarily stopping the opening of the business.

Goyang Fasion Outlet Alliance’s president Yi, Changheui stated that “Gyeonggi-do being blind to the attraction of investment, have their hands tied about the collapse of the business district saying we don’t know.” Yi, Changheui asked “if the attration of foreign capital is taking the bread off from the area’s main economic “units”, what value does it have?” On the 18th, some 200 owners of local small to medium sized businesses began to demonstrate, pressing for their right to survive.

Gyeonggi Outlet Alliance’s interested parties said “as per our own investigation due to the opening of Paju’s Shinsegae Chelsea, the sales of some 400 small outlets in Goyang, Paju, Gimpo and other cities in the area northwest of Seoul have decreased by some 37%. If at the end of the year Lotte Outlet is opened in Paju, sales will drop 61% and within 1 or 2 years most businesses will close.”

The governor of Gyeonggi-do, Kim Munsu visited America in September of 2009 and signed a MoU with Chelsea attracting $80,000,000 in foreign investment promising to participate actively. The head of Gyeonggi-do’s Foreign Investment Promotion department, Kim Jinmun stated “In attracting Shinsegae Chelsea to Paju we are expecting about 3000 new jobs and to attract 300,000 customers, reving up the economy of Northwest Gyeonggi-do. Gyeonggi-do does not have the jurisdiction over business arbitration, but by means of private arbitration by those directly involved we are searching for a measure that is a ‘win-win’ for everyone.

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