[BizHanKook] Samsung Electronics is drawing attention for filing an auction request for two retail units within a complex shopping mall in Yangjae-dong, Seocho-gu, Seoul. Samsung Electronics previously filed for an auction on the same property in 2022, but the proceedings were terminated following a court dismissal at the time. As the company has returned to the auction process four years later, interest is focused on the background of the creditor-debtor relationship.
Samsung Electronics holds approximately 300 million won in claims against Hi-Brand developer
On November 4, the Seoul Central District Court held the first sale date for two retail units on the first floor of the ‘Hi-Brand’ fashion hall, a complex shopping mall in Yangjae-dong, Seocho-gu, Seoul. The total appraised value of the two units was 710 million won, but the auction failed due to a lack of bidders.
According to BizHankook's coverage, the creditor who filed for the auction was confirmed to be Samsung Electronics. The debtor is ‘Inpyeong,’ the developer in charge of the Hi-Brand project in 2005. Samsung Electronics filed for a voluntary auction in January of this year with a claim amount of 265 million won, and the court issued an order to commence the auction in February.
Samsung Electronics established a collateral security (mortgage) on these units 14 years ago, in July 2012. At the time, Samsung Electronics established a joint mortgage on two retail units in the Hi-Brand fashion hall with a maximum claim amount of 450 million won.
Hi-Brand is a complex shopping mall located in Yangjae-dong, Seoul. Built with a scale of 3 basement levels to 19 floors above ground and a total floor area of approximately 160,000 square meters, it operated a fashion hall and an electronics hall when it opened in 2005. It is known that Samsung Electronics also operated a large store and service center of about 150 pyeong (approx. 495 square meters) in Hi-Brand in the past.
The timing of Samsung Electronics' establishment of the mortgage coincides with the period when the electronics stores within Hi-Brand were being withdrawn and a change of use was being pursued. The developer, Inpyeong, carried out construction in 2012 to remove some of the electronics stores on the lower floors of Hi-Brand and convert them into offices. Because of this, there is speculation that Samsung Electronics' mortgage might have originated from issues related to lease deposits or settlements from store operations at the time.
This is not the first time Samsung Electronics has filed for an auction of Hi-Brand retail units. In January 2022, it also filed for a voluntary auction of Hi-Brand units owned by Inpyeong. Although the court issued an order to commence the auction at the time, the proceedings were terminated when the auction request was dismissed in November of the same year. Samsung Electronics maintained the mortgage thereafter and returned to the auction process again this year.
Dozens of retail units appear at auction with repeated failures… Samsung Electronics' first sale date also fails
Hi-Brand, a large complex shopping mall in the Gangnam area that opened in 2005, once drew attention as a premium urban outlet, with around 250 brands housed within. However, due to poor public transport accessibility and intensified competition among large complex shopping malls since the 2010s, customer traffic gradually declined.
Hi-Brand subsequently sought new breakthroughs. It attempted to enter the city duty-free business and considered a plan for Lotte Department Store to lease the fashion hall and operate it as an urban outlet. However, neither project came to fruition. In particular, existing merchants left in the process of pursuing the entry of Lotte Department Store, and as the contract fell through, it is known that attracting new brands faced setbacks afterward.
In 2019, the fashion hall was refurbished as ‘La Citta della Moda,’ a complex cultural space, in an attempt to turn the situation around. However, evaluations suggest it did not achieve as much success as expected. Currently, with the exception of some stores such as E-mart and Modern House on the first basement floor, a significant number of retail spaces have been converted into offices.
Many other retail units within Hi-Brand are also up for court auction. According to the Seoul Central District Court, Industrial Bank of Korea (IBK) filed for a voluntary auction targeting 49 units within Hi-Brand in 2023. The total auction claim amount reaches approximately 5.143 billion won. Among these, successful bids have been confirmed for 26 units, while the remaining 23 units continue to face auction failures.
Interest is also focused on whether Samsung Electronics will be able to recover its claims. This auction failed from the first sale date as there were no bidders. Since other retail units in Hi-Brand continue to face repeated failures, there is speculation that it may take some time for Samsung Electronics to recover its claims through the auction.
A spokesperson for Samsung Electronics replied, "We understand that we withdrew our store from Hi-Brand in 2018," adding, "It is difficult to confirm the specific subsequent legal procedures and the progress of the auction." Attempts were made to contact Inpyeong to hear their position regarding the circumstances of the mortgage and the auction, but they could not be reached.