COVID-19 speeds up the brand's plan to place greater emphasis on shoppers online.By The Staff - May 25, 2020
As the COVID-19 pandemic continues to hurt retailers worldwide, South Korea’s Lotte Shopping has said it will sell 121 stores this year. The country’s leading retail brand said over the next three to five years it will downsize nearly 30 percent or 200 of its 700 stores which include department stores, supermarkets, and large discount stores reports the Korea media. The brand said it will, however, continue to strengthen its e-commerce business as more consumers move to buy online.
While place more emphasis online was already planned, Lotte said that the pandemic has sped up the restructuring process. Lotte saw substantial losses in Q1 this year to the tune of a 43.33 billion won ($35 million) net drop in the first quarter this year – a massive fall from last year’s 109.17 billion won net profit.
“We have decided to swiftly sell off less profitable assets to enhance our financial situation as it has been heavily affected by the COVID-19 outbreak,” a Lotte Shopping official said in a conference call after releasing its first-quarter earnings results on May 14.
According to the plan, Lotte plans to close 121 stores, including five department stores, 16 discount stores, 75 supermarkets, and 25 LOHB’s outlets, by the end of the year.
The company said there will be no forced layoffs during the asset sales process, but some job cuts are widely expected at the subjected stores, reports Yonhap.
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