Lotte Group reshuffles No. 2 chief, holding management amid slack mainstay businesses

South Korea’s Lotte Group has replaced executives with younger faces as the fifth largest conglomerate fast needs to explore and groom new growth engines amid staggering mainstay operations in retail and chemical businesses.

Lotte Group said Thursday its board directors have approved a plan to promote Lee Dong-woo, CEO at Lotte Himart Co. and replace Hwang Kak-gyu as the vice chair of Lotte Corp. who has offered to resign after 40 years of service to Lotte. He will keep his board chair seat.

Lee ascends to three-way leadership of Lotte Group Chairman Shin Dong-bin and Vice Chairman Song Yong-dok. Lee will be in charge of external business activities and Song internal management.

Hwang Young-geun will fill Lee’s place at Lotte Himart, the group’s consumer electronics retail unit.

Other top positions at Lotte Corp, the holding entity of the conglomerate, were also reshuffled. Yoon Jong-min, president and business strategy team head at Lotte was repositioned to lead the group’s human resources development institute. Lee Hoon-ki, CEO at Lotte Rental Co. will be replacing Yoon as the group’s business strategy chief. Ryu Je-don, chairman’s secretarial team chief is moving to head Lotte Property & Development.

The rare summer reshuffle is aimed at overhauling business portfolio due to slump in flagship operations and strengthening the hold of Shin by filling the management of the holding company with his men.

Grocery mainstays Lotte Mart and Lotte Super have fallen deeper into the red in the second quarter while Lotte Chemical reported 90 percent plunge in operating profit. Lotte Himart and Lotte Home Shopping were the only ones that delivered improved earnings in the second quarter.

While the coronavirus crisis has dealt a big blow on retailers, the impact had been harder for Lotte whose retail business already has been weakening from multiple setbacks related to diplomatic issues. Its retail business was forced to move out from China under Beijing-led boycott triggered by group’s yield of a land in Korea for deployment of U.S. missile defense system THAAD in 2017. In Korea, its imported Japanese brands Uniqlo and Asahi beer were battered by Koreans’ boycott on Japanese products amid diplomatic spat over past wartime issues.

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