이 기사는 2021년 04월 29일 08:00 thebell 에 표출된 기사입니다.

HDC Shilla Duty Free, the joint venture between HDC Holdings and Hotel Shilla, saw only a small decline in inventory last year, as the two owners of the company clashed over how to deal with unsold stock.

Unsold inventory carried by HDC Shilla Duty Free, which operates Shilla I-Park Duty Free Shop in Seoul, amounted to 104.9 billion won ($94.2 million) at the end of 2020, down only 21.5% year on year.

This contrasts with other competing duty free retailers, such as Lotte Duty Free and Shinsegae Duty Free, which reduced their inventories significantly last year by selling them off through various channels in the face of unexpected hardship caused by the Covid-19 pandemic.

HDC Shilla Duty Free has explained that it sold off duty free products that have expiry dates and decided to keep the rest to sell them at the right price after business conditions recover.

However, Hotel Shilla and HDC were divided on how to deal with unsold inventory, according to industry sources. Hotel Shilla, which has long been in the duty free business, argued that they should sell off unsold stock and purchase products that meet new needs of consumers. But HDC did not agree to sell inventory at a loss.

HDC Shilla Duty Free was launched in 2015 with Shilla Hotel and HDC each holding a 50% stake. The business was led by Hotel Shilla at first, but now HDC seems to have a more significant influence on the company, industry watchers said.

For Hotel Shilla, its strategic focus has shifted from the number of stores after the duty free industry slowed down due to the impact of an reduction in Chinese tourists following a chilled relationship between South Korea and China in 2017. Meanwhile, HDC had been aiming for synergy with its planned acquisition of Asiana Airlines, but it ultimately withdrew from the deal.

“It’s difficult to confirm that our management had a different opinion from HDC on how to deal with unsold inventory,” said an official at Hotel Shilla. “HDC Shilla Duty Free is doing its best to minimize the impact of the pandemic.” (Reporting by Seon-ho Kim)