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Hanwha's Kim Dong-seon closes personal sushi restaurant; shift in focus to new business ventures?

[비즈한국] It has been confirmed that Kim Dong-seon, Executive Vice President of Future Vision at Hanwha Galleria452260 & Hotel & Resort and the third son of Hanwha000880 Group Chairman Kim Seung-youn, has transferred ownership of Sugimoto, a high-end Japanese restaurant he personally operated, to another party. As Vice President Kim has recently been aggressively pursuing various new business ventures while overseeing Hanwha’s retail division, speculation is growing that he shuttered the restaurant to increase his focus on corporate management.

Vice President Kim Dong-seon, who opened a sushi omakase specialty shop, transfers restaurant after 3 years

According to Bizhankook’s investigation, Vice President Kim transferred the operating rights of Sugimoto, a sushi omakase specialty shop in Sogeok-dong, Jongno-gu, Seoul, which he personally managed, to another business operator at the end of July last year. The lease agreement for the building, which was signed for the restaurant's operations, was also confirmed to have terminated at the same time.

Person A, who took over the shop from Vice President Kim, resumed operations in mid-August after a few days of reorganization. Because the restaurant maintained the same interior and concept as it had under Vice President Kim, few people were aware that he had sold it. Some media outlets were still describing Vice President Kim as the operator of the restaurant as recently as early this year.

Person A stated, "I acquired the shop last year. Currently, (Vice President Kim Dong-seon) is not involved in the restaurant's operations at all."

The news that Vice President Kim had personally opened a sushi omakase shop in July 2021 generated significant buzz. In particular, gourmets were intrigued by reports that he had recruited a chef from the famous Japanese restaurant "Nobu" in New York. It was introduced in various media outlets as a "chaebol third-generation’s restaurant." Sugimoto, operated by Vice President Kim, even won an iF Design Award in 2022 for its sophisticated interior.

Vice President Kim also held great affection for the restaurant. In the early stages of opening, it is said that he took such an interest in its management that he would visit the shop four or five times a week. He actively promoted the restaurant on his personal social media and even took photos of menu items to post on portal site reviews, leaving comments such as "Best sushi I ever had."

However, the initial buzz did not seem to last long. Industry insiders rumored that Sugimoto's revenue fell short of expectations. Sugimoto, which operated solely on a reservation-only basis, was priced at 120,000 won for lunch and around 200,000 won for dinner. High-end omakase shops in similar price ranges typically do not offer delivery. Yet, Sugimoto temporarily introduced a delivery menu in 2022. This led to speculation that the restaurant's profitability had dropped significantly.

Vice President Kim has previous experience running restaurants himself. After resigning from Hanwha E&C following controversies in 2017 involving the assault of lawyers and pub staff, he moved to Germany and started an Asian restaurant business. He opened a Chinese restaurant in Basenberg and managed Japanese restaurants and lounge bars in Düsseldorf.

A Hanwha Galleria representative responded, "This is the first we’ve heard of it (the closure of Sugimoto). Since it was run personally, it is not something the company would know about."

Person A, who took over Sugimoto from Vice President Kim, said, "I don't know the exact reason (for Vice President Kim) leaving the business. However, since he is involved in many projects this year, I think he may have felt there was no need to maintain such a small establishment."

Expanding new businesses: From Five Guys openings to ice cream launches

Vice President Kim appears to be setting aside the operation of Sugimoto, a project he started with deep personal attachment, to focus on managing the company. As the executive responsible for Hanwha's retail division, he has been putting significant effort into growing the F&B business.

In 2023, he established the subsidiary FG Korea to bring in the American burger chain "Five Guys," which has now expanded to seven locations. In June last year, he signed a memorandum of understanding for Japanese business rights and established a Japanese subsidiary in January this year. The plan is to continue opening Five Guys stores, centering on Tokyo.

He also appears to be making another attempt at the ice cream business. This month, Hanwha Galleria will open the first store of the premium real ice cream brand "Benson" near Apgujeong Rodeo Station in Gangnam-gu, Seoul. Benson is conceptualized as a premium ice cream brand that uses domestic milk and high-quality ingredients to bring out the natural flavors of the produce. It shares a similar concept with "EBA," an ice cream brand introduced by Hanwha Galleria in 2018. EBA did not gain much popularity in the market and was discontinued in 2023.

At the end of March this year, Chairman Kim Seung-youn decided to gift half of his 22.65% stake in Hanwha Corporation to his three sons, a move interpreted by some as signaling the near completion of Hanwha's succession process. However, there remains a question mark over Vice President Kim's management capabilities. Despite his aggressive moves into new businesses, Hanwha Galleria's performance has been sliding. Due to the slump in its core department store business, Hanwha Galleria recorded an operating profit of 3.1 billion won last year, a 68% decrease from the previous year (9.8 billion won).

A Hanwha Galleria representative stated, "Currently, the proportion of F&B revenue has risen to about 10% of total sales. We plan to continue our two-track strategy of strengthening our core department store competitiveness while expanding our F&B new businesses."