Retail archrivals Lotte and Shinsegae are clashing head-on all across the country ― in Busan, Incheon and regions northwest and southeast of Seoul.

Shinsegae’s premium outlet in Paju, Gyeonggi Province, is scheduled to open its expanded section to host some 52 new brands next Friday, adding to its existing 167 labels.

The suburban outlet was enlarged by about 30 percent to 40,182 square meters.

“We cannot confirm the names of the new brands until our press conference next Thursday,” said Shinsegae Simon spokesperson Choi Kyung-hee.

The expansion comes just two years after the outlet opened as Shinsegae lost much of its sales to the nearby Lotte outlet, which was on a roll from the beginning thanks to having the nation’s first Prada outlet and a wider range of mid-priced brands.

Lotte is estimated to have made 306 billion won ($273 million) in sales in Paju alone last year, around 20 percent higher than its target and much more than the 253 billion won of the adjacent Shinsegae outlet.

Despite having pioneered the premium outlet business in Korea by opening the Yeoju outlet in 2007, Shinsegae, the nation’s 17th-largest conglomerate by assets, was constantly challenged by its greater foe.

Just nine months after Shinsegae opened its Paju outlet in March 2011, Lotte opened a larger one about 5 kilometers away.

In just a year, Lotte’s Paju outlet beat Shinsegae’s Yeoju outlet in sales, taking its No. 1 spot in the premium outlet sector.

As Shinsegae prepared to open an outlet in Kijang, about half an hour’s drive northeast from Busan, in September, Lotte announced it would open its own in the same county by 2015.

Lotte is set to open another outlet in Icheon, just 20 kilometers from Shinsegae’s Yeoju outlet in southeastern Gyeonggi Province in October.

Shinsegae plans to double the size of the Yeoju outlet by next year.

The cut throat competition stemmed from a series of real estate battles that began years ago.

In 2009, Lotte filed a 5 billion won damage suit against CIT Land which sold a site in Paju to Shinsegae, claiming that the landlord unduly broke off a lease contract with Lotte.

The court ruled that the lease contract was legitimately renounced, ordering CIT Land to return only the contract expense of 400 million won.

Last year, Shinsegae filed a lawsuit against Incheon City for agreeing to sell the Incheon Express Bus Terminal where Shinsegae has been operating its third-largest department store by sales since 1997.

Having lost the Incheon site to Lotte, Shinsegae on Monday succeeded in acquiring the Seoul Express Bus Terminal site which houses its second-largest department store by sales.

Industry watchers speculate that the two retail giants will lock horns once again in Gwangju over the city’s bus terminal site currently leased by a Shinsegae department store.

By Kim So-hyun (sophie@heraldcorp.com)