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South Korean retail giant Lotte Group will significantly scale back brick-and-mortar business and shutter 200 grocery, department or discount outlets, or 20 percent of its retail operation in Korea within the year, its chair said in an interview with a Japanese paper.
The group aims to start anew by doing away with money-losing operations, Lotte Group Chairman Shin Dong-bin told Nikkei newspaper on Thursday.
The group will lose about 20 percent of Lotte offline retail stores, or 200 outlets, in Korea this year based on performance review. The group currently operates 536 supermarkets and big-box stores, 591 specialized retail outlets including home appliance retail chains, and 71 department stores across Korea. It will reduce 20 percent of discount and grocery outlets and five department stores.
Lotte Shopping, responsible for nearly 40 percent of the group revenue, now makes just a third of the profit of five years ago due to softening consumer demand and fiercer competition from online players, said the newspaper.
Shin said the group will unify separately managed online retail businesses and build a system that will enable consumers to pick up their ordered items at a nearby Lotte outlet.
The group last month began a new service called Lotte On, which combines the group’s online shopping businesses into one.
On top of reshaping the retail business, the group will expand investment in hotel and chemical sectors to nurture them as the group’s two pillar businesses for its global expansion.
Shin unveiled an aggressive plan of running 30,000 hotel rooms across the world, or twice the current operations, in five years. He said the group will actively look for attractive buyouts to grow its hotel business.
For chemical business, Shin said the group will also mull acquiring chemical companies in Japan that have strong growth potentials.
[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
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