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Tag: Lotte

  • Lotte Group plans US$2.8 billion e-commerce spend

    Lotte Group plans US$2.8 billion e-commerce spend

    Korea’s Lotte Group plans to invest KRW3 trillion (US$2.8 billion) into its e-commerce business.

    Lotte Shopping CEO Kang Hee-tae says a comprehensive online shopping platform will integrate all eight of its online stores by 2020. Lotte Group will form a business department in August dedicated to developing its e-commerce business. Its various retail businesses, including its discount chain Lotte Mart and electronics outlet Hi-Mart, each run separate online shopping platforms.

    “Lotte plans to dedicate KRW500 billion to developing the online and mobile service platform,” says Kang. “It will invest KRW1 trillion in systematising distribution and logistics and KRW1.5 trillion for marketing.”

    Lotte Shopping and Lotte Group will each invest KRW1.5 trillion in the project.

    Meanwhile, Lotte Shopping, which runs Lotte Mart, Lotte Department Store and Lotte Cinema, has already announced it will merge with Lotte.com, the retail giant’s first online shopping platform, which sells goods from the department store.

    Lotte.com, which was the first e-commerce site from a Korean conglomerate when it launched in 2000, has fallen behind industry rival Shinsegae’s SSG.com, which offers products from its discount chain Emart and Shinsegae Department Store.

    Lotte’s plan follows a January announcement by Shinsegae that it would invest more than KRW1 trillion in a company to oversee Shinsegae’s entire e-commerce business.

    Lotte is banking on its large number of registered customers and offline stores to strengthen its e-commerce business. It has 11,000 retail outlets in Korea, and also has data on more than 38 million registered customers across its online and offline stores.

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  • Second Lotte China sold

    Second Lotte China sold

    South Korean retail giant Lotte has sold a second discount store unit in China to a local retailer in a major step toward withdrawing from the world’s second-largest economy.

    Lotte Shopping will sell its affiliate for Lotte Mart in Shanghai and nearby areas to Liqun Group for about 280 billion won (US$262 million), according to the company.

    Out of the 74 Lotte Mart outlets in the region, only four are currently open, with the others either voluntarily or compulsorily shut down. Liqun is known to be interested in taking over some 50 outlets, with the remainder expected to be shuttered.

    The Korean retailer’s move comes about two weeks after the company decided to sell its unit that operated 21 stores in Beijing to another local retailer, Wumei Holdings, for 248.5 billion won.

    The deal with Liqun would leave Lotte with 14 discount stores in China. The Korean firm is in talks with a number of retailers to wrap up the sales of the remaining stores within the first half of this year.

    In September, Lotte Mart announced that it would pull out of China over heavy losses in the wake of a diplomatic row between Seoul and Beijing. Lotte Group bore the brunt of Beijing’s economic retaliation after the company handed over its golf course in South Korea’s southeastern rural county of Seongju for the deployment of a US missile defense system.

    Seoul and Washington said the anti-missile system is only meant to counter North Korea’s evolving nuclear and missile threats. But China has repeatedly pressed South Korea to withdraw the missile system out of concern that the deployment could hurt Beijing’s security interests.

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  • Lotte Shopping closing down

    Lotte Shopping closing down

    Lotte Shopping is trying to offload its department store annexed to Anyang train station, 20km from Seoul.

    It is said to be in the final stage of closing a deal with shopping mall group Enter Six to either sell or transfer its lease rights on the store, reports Pulse.

    With nine floors above ground and one below, Lotte Department Store Anyang is connected to the Anyang station and is within walking distance of an intercity bus terminal.

    After opening in 2002, the branch was the only major shopping mall in the area, but sales nosedived after Lotte Department Store’s Pyeongchon branch opened in March 2012. The two Lotte department stores are only 2.8km apart. The retailer still has nearly half of its 30-year lease term left on the Anyang building.

    Lotte Shopping is shutting down its poor-performing stores. Meanwhile, E-mart, the big-box store chain of Shinsegae, also has been scaling back.

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  • Lotte unveils El Cube Game in Korea

    Lotte unveils El Cube Game in Korea

    South Korean retail giant Lotte opens a dedicated game products store in Seoul tomorrow amid a rapid growth of the country’s computer game industry.

    Lotte Shopping Co said it has remodelled its el Cube store in Hongdae, western Seoul, into a shop exclusively for games, to be called el Cube Game.

    El Cube is Lotte Department Store’s “mini” version, targeting consumers in their 20s and 30s. There are currently five el Cube outlets throughout the country.

    Lotte said the first offline store of Netmarble Games, South Korea’s top mobile game maker, will open at its outlet in Hongdae, one of South Korea’s most popular hangout places.

    The El Cube game store will also sell toys targeting “kidults,” referring to adults with a keen interest in toys that many regard as for children, it said.

    The market size of South Korea’s game industry was valued at around 11.5 trillion won (US$10.84 billion) as of last year, up 18.5 per cent from 9.7 trillion won in 2013, Lotte said, citing the Korea Creative Content Agency.

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  • Lotte Duty Free will exit Incheon on 7 July 2018

    Lotte Duty Free will exit Incheon on 7 July 2018

    Lotte Duty Free announced today that it will exit three of its four loss-making concessions at Incheon International Airport Terminal 1 on 7 July.

    The move follows Incheon International Airport Corporation’s (IIAC) acceptance of the retailer’s contract resignation and Lotte’s payment of an undisclosed penalty charge.

    The exit date is 120 days from IIAC’s approval of the resignation.

    As reported, Lotte Duty resigned the DF1 (P&C), DF5 (leathergoods & fashion) and DF8 (all categories) concessions on 13 February. The contracts, which Lotte won in early 2015, were due to run from September 2015 to August 2020. Lotte Duty Free said that its T1 stores have recorded losses of KW200 billion (US$184 million) since 2016. The contracts would run up a deficit of KW1.4 trillion (US$1.3 billion), the retailer claimed, if the stores continued to operate for the full term in 2020.

    Lotte Duty Free will continue to operate the main T1 alcohol and tobacco business concession (DF3).

    Report said, IIAC will retender the three contracts, probably later this month.

    Normally, one would expect Lotte’s rivals The Shilla Duty Free and/or Shinsegae Duty Free, to seize on the opportunity to snap up more Incheon business. However, both companies are also locked in talks with IIAC to try to further reduce their own T1 concession fees in the wake of the dilutive impact of the T2 opening.

  • Lotte to sell hypermarket chain in China

    Lotte China plans to wrap up the sales of its hypermarket chain in China within the next three months.

    Potential buyers have started to inspect the South Korean retail giant’s stores. While many have reviewed documents, Chinese retailer Liqun Group was the first to carry out on-site inspections of Lotte Mart’s Chinese stores.

    However, a Lotte Mart official says three or four other companies also also planning on-site inspections.

    He says Lotte’s aim is to complete the sales process by June, when about KW700 billion (US$653 million) of emergency funds it has injected into its Chinese retail business is expected to be run out.

    Lotte announced its decision to sell its Chinese stores in September after being hit by major losses in the wake of a diplomatic row between Seoul and Beijing over a US anti-missile system. The retailer bore the brunt of Beijing’s retaliation after signing a land-swap deal with the South Korean government to provide a golf course to host the missile shield system.

    Eighty-seven of its 99 Lotte Mart discount stores in China suspended trading, while sales at the few stores that managed to stay open tumbled more than 80 per cent. The group lost about KW1.2 trillion in lost sales in the process.

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  • Reiss North Korea makes debut

    Reiss North Korea makes debut

    British fashion brand Reiss has launched in South Korea, at Shinsegae Department Store in Kangnam.

    Introduced by Shinsegae International, the brand plans to open 12 stores in both Shinsegae and Lotte department stores across the country by the end of this year.

    Reiss says it expects high sales with its offering of trending items priced to compete with local and international brands.

    Founded in 1971, Reiss offers designs inspired by classic movies and artworks. Its international expansion has also taken it to the US, Canada and Australia.

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  • Lotte’s chair resigns Japanese CEO role after bribery conviction

    Lotte’s chair resigns Japanese CEO role after bribery conviction

    The chairman of South Korea’s Lotte Group has resigned as the chief executive of its Japan-based holding company, following his conviction for bribery charges last week.

    Lotte Holdings held a board meeting on Wednesday and accepted Shin Dong-bin’s resignation, following a Japanese tradition of convicted chief executives stepping down, the group said in a statement. But Mr Shin will retain his post as vice-chairman of Lotte Holdings and the move will not affect his status in Lotte’s Korean units, the group added.

    Lotte Holdings is at the heart of the retail-focused conglomerate’s complex ownership structure and indirectly controls the group’s key businesses in South Korea such as Lotte Hotel and Lotte Chemical through cross shareholdings.

    Mr Shin’s resignation as chief executive of the holding company comes after a South Korean court sentenced him to two-and-a-half years in prison for bribery, in a stern warning to the country’s political and business elites. Mr Shin was found guilty of offering Won7bn in bribes to foundations of the long-time confidant of former South Korean president Park Geun-hye in return for political favours.

    Lotte said Mr Shin’s resignation would likely have a negative effect on business cooperation and synergies between the group’s South Korean and Japanese operations.

    Mr Shin is appealing the court case. However, his legal troubles could reignite a family dispute over management control at South Korea’s fifth-largest conglomerate and slow its group-wide restructuring efforts.

    Lotte officials are also concerned that Mr Shin’s detention could undermine Lotte’s major investment plans as the group grapples with ballooning losses in China.

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  • Lotte Group Chairman jailed for duty free licence bribery

    Lotte Group Chairman jailed for duty free licence bribery

    Lotte Group, parent of the country’s leading travel retailer Lotte Duty Free, is reeling from the shock jailing of its Chairman Shin Dong-bin on 13 February 2018.

    Following a Seoul Court’s guilty verdict and simultaneous sentencing of 2 1/2 years in jail to Lotte Chairman Shin Dong-bin for bribery, Lotte Group voiced concerns over its future business plans.

    In an official statement, Lotte Group said the outcome was “unexpected” and it was “regretful” about the jail term, and insisted that Shin was innocent.

    “As soon as we receive the written judgement, the group will discuss with its attorneys for further process,” the group said.

    “But what worries us is not being able to achieve our promise with customers, such as listing our hotel business, completing the establishment of the holding company, as well as investment and employment expansion plans,” the group added.

    The group said it would activate its emergency management system to reassure employees, customers and shareholders.

    With Shin’s sentence, the business license for Lotte Duty Free branch in World Tower in southern Seoul may be at risk, according to industry watchers.

    The National Tax Service said it has launched a review of the licensing process upon the sentencing.

    In what is now referred to as the “duty free war” in 2015, Lotte had lost its duty free business right in the license screening process in November of that year. Then in 2016, the government announced a plan to dole out an additional duty free license in Seoul, for which Lotte won in December of the same year. The court found the duty free business as one of the management issues for Shin.

    The company will continue to support the ongoing 2018 PyeongChang Winter Olympic Games as an official partner with help of the vice president of Korea Ski Association, it added.

    Shin became the president of the Korean Ski Association in 2014 and has been supporting the Korean ski team since then. He is also a member of the 2018 PyeongChang Organizing Committee’s governing board and has been a member of the International Ski Federation since 2016.

  • Lotte Shopping swings to loss in 2017 due to THAAD row

    Lotte Shopping swings to loss in 2017 due to THAAD row

    Lotte Shopping Co., the retail affiliate of South Korea’s fifth-largest conglomerate Lotte Group, said Thursday it swung to the red in 2017 from a year earlier amid a diplomatic row between Seoul and Beijing over the deployment of a U.S. anti-missile system here.

    Its losses reached 20.6 billion won (US$18.9 million) on a consolidated basis last year, compared to a net profit of 246.9 billion won posted in 2016, the company said in a regulatory filing. The firm operates Lotte’s key retail units, including its department store and hypermarket chains.

    Operating income stood at 530.3 billion won, down 30.5 percent on-year, and sales dropped 24.6 percent to 18.2 trillion won during the cited period, it said.

    The numbers reflect the performance of Lotte Shopping and its subsidiaries, including Lotte HiMart Co., which specializes in electronics and home appliances.

    The drop in the revenue was largely expected following Beijing’s apparent retaliation over Seoul’s deployment of the U.S. Terminal High Altitude Area Defense (THAAD) system on its soil. Lotte Shopping was one of the most affected companies from the economic retaliation after it signed a land-swap deal with the Seoul government to host the missile shield system.

    Shares of Lotte Shopping soared 4.17 percent to close at 250,000 won on the main bourse Thursday, with the broader KOSPI index gaining 0.46 percent. The earnings results were released after the stock market closed.

     

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  • UAE firm in deal to supply naptha to Lotte Chemical Titan

    UAE firm in deal to supply naptha to Lotte Chemical Titan

    Lotte Chemical Titan Holding Bhd’s wholly owned subsidiary Lotte Chemical Titan Sdn Bhd has entered into a three-year sales contract with United Arab Emirates-based Abu Dhabi National Oil Co  for the supply of refined products and paraffinic naphtha.

    The group announced in a stock exchange filing that the contract runs from Jan 1, 2018 to Dec 31, 2020.

    Pricing of the supplies will be based on the market price of the commodity during the loading month. The estimated quantity is between 600,000 tonnes and 1 million tonnes a year.

    ADNOC is a major feedstock supplier of naphtha to Lotte and had previously supplied the commodity in a one-year contract.

    Lotte’s shares gained 0.39% to close at RM5.18 with some 731,300 shares done.

  • FTC chief urges conglomerates to improve ownership structure

    FTC chief urges conglomerates to improve ownership structure

    The head of South Korea’s antitrust watchdog said on Dec. 31 that the country’s large businesses groups should work hard to improve their complicated ownership structures and refrain from wielding their market dominance.

    “Large conglomerates should make efforts to curb their economic power and to improve their ownership structures,” Fair Trade Commission Chairman Kim Sang-jo said in his message for 2018.

    “They should also work hard to stem unfair business practices that hurt smaller firms,” Kim said.

    Kim, a former civic activist, said he will keep monitoring large business groups that abuse their market dominance and exert undue pressure on subcontractors and small-time enterprises.South Korea‘s conglomerates have been under fire for years for largely relying on controversial cross-shareholding arrangements among their affiliated companies to strengthen their owner families’ control over the entire group.

    The FTC chief also vowed to carry out sweeping reforms to root out unfair business practices and strengthen consumer protection.

    “In order to help smaller firms seek innovative growth, a level-playing field is necessary,” Kim said, adding that harsh punitive measures will be taken against unfair contract terms.

    Earlier, the FTC unveiled a plan to impose punitive damages of up to three times the actual losses incurred by illegal business practices, such as unfair payments and returns, as well as cutting back supplied goods, which frequently occur between large shopping mall operators and smaller partners.

    The South Korean distribution industry is currently led by huge retailers, department stores and discount outlets that lease their spaces to small businesses. Big-name retail giants, such as Lotte, Shinsegae and Hyundai Department Store, take up the bulk of the market share and wield great influence over the entire industry.

     

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  • Lotte chemical to expand polyethylene manufacturing unit in Malaysia

    Lotte chemical to expand polyethylene manufacturing unit in Malaysia

    Lotte Chemical Corp., the compound unit of Lotte Group, has extended its polyethylene plant in Malaysia to support deals in Southeast Asian markets, the organization said.

    Lotte Chemical has contributed 300 billion won (US$276 million) in growing the polyethylene production facility in Malaysia since 2015 and finished the extension venture in August, the organization said in an announcement.

    The Lotte Chemical Titan Holding Berhad plant now has a manufacturing limit of 810,000 tons of polyethylene, up 13 percent from the past limit of 720,000 tons, it said.

    Lotte Chemicalclaims a 74.87-percent stake in the plant which for the most part delivers polyethylene, the most widely recognized of plastic items. Lotte Property and Development holds a 31.27-percent stake in Lotte Chemical. The organizations are affiliates of Lotte Group, a retail-to-construction aggregate.

    Lotte Chemical intends to extend its manufacturing facilities in South Korea and the United States one year from now to have a consolidated polyethylene yield limit of 4.5 million tons globally, up from 3.3 million tons it is forecasting for the finish of 2017, the announcement said.

     

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  • Lotte Group boss facing jail terms

    Lotte Group boss facing jail terms

    In a new headache for South Korean retail giant Lotte Group, its boss faces jail terms over bribery and other charges.

    Chairman Shin Dong-bin has been accused of giving KW7 billion (US$6.4 million) in bribes to a foundation run by former President Park Geun-hye’s friend Choi Soon-il while seeking favours to win a government licence to run a duty-free business in Seoul.

    Prosecutors demanded a four-year jail term for Shin for the alleged bribery, while his lawyers have denied the accusation.

    Separately, prosecutors asked a court to hand down a 25-year prison term for Choi, who was at the centre of the corruption scandal that led to impeachment and arrest of Park.

    Seoul Central District Court will hand down its judgment on Shin on January 26. The court is also set to issue a separate sentence on Shin next Friday on charges of embezzlement and breach of trust.

    Prosecutors suspect Shin paid KW50 billion in wages to people who had never worked for its affiliates, and inflicted KW130 billion in losses on the business group’s subsidiaries by forcing them to cover the losses of other units. Prosecutors have demanded a 10-year jail term.

    “We will go through the remaining court procedures in a sincere manner,” says a Lotte official.

    Two months ago Lotte established the holding company Lotte Corp in a bid to solidify Shin’s leadership.

    Meanwhile, the group is said to have incurred about KW2 trillion in damages in recent months amid the Seoul-Beijing diplomatic spat over the deployment of a US missile defence system in South Korea.

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  • Lotte Duty Free to partner with Klook

    Lotte Duty Free to partner with Klook

    Travel booking platform Klook has signed a memorandum of understanding with Korea’s Lotte Duty Free Shop to attract more travelers to South Korea by offering shopping deals.

    Shopping ranks as the top activity for 67.2 per cent of tourists in Korea, according to the Korea Tourism Organisation. This is followed by such activities as dining, cultural and historical tours, and sightseeing.

    Under the partnership, Klook will introduce Lotte DFS shopping discounts for its users. The discounts can be taken up in any Lotte DFS store in Korea. Also, Lotte DFS customers will be offered discounts of up to 70 per cent on Klook travel experiences in more than 120 destinations.

    The dual marketing campaigns are being rolled out this month.

    With its headquarters in Hong Kong, Klook became established in Korea early this year. Its services include e-tickets to Lotte World, entry to the Nanta Show culinary performance, Korea Rail Pass, restaurant deals and exclusive snow activities in Pyeongchang, where the Winter Olympics 2018 will be held.

    Klook’s network of more than 3000 direct partners includes such attractions as Bangkok’s Blue Elephant Cooking School, Disneyland, Hong Kong’s Ngong Ping 360 and Universal Studios.

    Founded in 2014, Klook has a team of more than 400 across 13 offices. Its services are available in seven languages, and it supports more than 30 currencies.

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