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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Seoul, August 28, 2025 — Negotiations between Shilla Duty Free, Shinsegae Duty Free, and Incheon International Airport over rent reductions have broken down, as the two retailers seek relief from heavy financial burdens amid a prolonged industry downturn.
At the second court-led mediation session held at the Incheon District Court on August 28, Incheon International Airport Corporation did not attend, leading the court to conclude that a voluntary settlement between the parties was unlikely. The court stated that it would instead issue a compulsory mediation proposal, though industry observers expect this process could take more than two weeks.
Even if a compulsory mediation plan is presented, it will not carry binding legal force. If Incheon Airport refuses to accept the proposal, the mediation will fail.
The airport operator has maintained that reducing rent set through international bidding could constitute a breach of fiduciary duty, making rent cuts impossible under its current stance. Unless the operator changes its position, final mediation is unlikely to succeed after the two-week objection period.
Shilla and Shinsegae Duty Free now face limited options: continue pursuing rent reductions through litigation, or exit operations at Incheon Airport altogether. Terminating operations would trigger penalty payments estimated at KRW 190 billion (approx. USD 140 million) per store.
Should Shilla and Shinsegae withdraw, potential successors such as Lotte Duty Free or China Duty Free Group (CDFG) are being discussed as possible new operators at Incheon Airport.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
