London Bagel Museum in Seoul's Anguk area bustles with visitors in this January 2024 file photo. Korea Times file

London Bagel Museum, the bakery chain that sparked Korea's recent bagel craze, is now pursuing a bold expansion strategy, which has sparked both optimistic and cautious predictions.

Retail industry insiders recognize the brand's sustained popularity, but caution that expansion doesn't always equate to long-term growth. They point to examples of other once-popular brands whose rapid expansion ultimately led to a dilution of their brand value.

Founded in Seoul's Anguk neighborhood in 2021, London Bagel Museum quickly became a hot spot for both locals and tourists, attracting crowds with its unique British-inspired decor and diverse bagel flavors.

The bagel maker's appeal is undeniable, as evidenced by the long lines forming outside its locations in Seoul, Suwon and Jeju.

LBM, the brand's operator, posted 36 billion won and an operating profit of 12.6 billion won in 2023. According to reports, a London Bagel Museum branch in Lotte World Mall in Jamsil, Songpa District, reached sales of 1.5 billion won ($1 million) on its own.

One of the key drivers behind the brand's success is its exclusivity. Despite its growing popularity, LBM operates just six outlets nationwide, creating a perception among consumers that its bagels are rare and highly coveted.

However, recent moves suggest that LBM is shifting gears. The company has been securing investments, opening more pop-up stores, and even launching online sales, signaling its intention to expand.

In October, news outlet the Bell said that LBM selected Bank of America as the lead manager for the brand's bid to raise up to 300 billion won for its global expansion. The company has reportedly also set up an office in Japan.

In August, Market Kurly, a popular online food market here, launched sales of London Bagel Museum's products online for the first time. London Bagel Museum also held a joint pop-up with food catering service provider Hyundai Green Food at the National Assembly earlier this month.

Despite these moves, there are concerns about whether LBM can maintain its allure as it expands. Similar chains like Knotted and Shake Shack have demonstrated that rapid market growth in Korea doesn't always translate into sustained sales.

"It is a common strategy for a popular food company to expand its market, maximize its value and then exit the market to secure the return of investment," a market expert said.

"It remains to be seen whether London Bagel Museum will keep seeing the same popularity alongside its market expansion."