April 26, 2024
Retail & Consumer
Lotte hit hard by THAAD row
[THE INVESTOR] Subsidiaries of Lotte Group saw their earnings tumble in the second quarter, data showed on Aug. 3, hit by China’s retaliation over Seoul’s decision to deploy THAAD.
In early March, Lotte agreed with the Seoul government to swap its golf course in the southeastern county of Seongju for a land lot near Seoul in order to allow THAAD’s deployment, which China suspects could be used to spy on its military.
Days later, Beijing banned its travel agencies from selling package tours to Korea in a big blow to Lotte, which depends on Chinese tourists for a considerable part of its revenue.
According to the data by the Financial Supervisory Service, the consolidated operating income of Lotte Shopping plunged 49 percent on-year to 87.3 billion won (US$78 million) in the April-June period.
Sales of the company, which runs Lotte Department Store and discount chain Lotte Mart, dipped 4.3 percent to 6.92 trillion won, with its bottom line nose-diving 95 percent to a mere 4.1 billion won.
Lotte Department Store saw its domestic sales decline due to the drop in Chinese customers, and revenue of its outlets in China sank 28.6 percent.
Sales of Lotte Mart, most of whose Chinese stores have been suspended by Beijing, fell 7.9 percent on-year in the second quarter, and the company posted an operating loss of 77 billion won. In particular, its Chinese sales plunged 94.9 percent.
Lotte Duty Free suffered a 20 percent drop in sales for the second quarter as revenue from Chinese tourists tanked 30 percent in the wake of China’s travel ban.
Other Lotte units, including Lotte Chilsung Beverage, Lotte Confectionery and Lotte Food, also suffered setbacks in the second quarter.
By Alex Lee and newswires (alexlee@heraldcorp.com)
In early March, Lotte agreed with the Seoul government to swap its golf course in the southeastern county of Seongju for a land lot near Seoul in order to allow THAAD’s deployment, which China suspects could be used to spy on its military.
Days later, Beijing banned its travel agencies from selling package tours to Korea in a big blow to Lotte, which depends on Chinese tourists for a considerable part of its revenue.
According to the data by the Financial Supervisory Service, the consolidated operating income of Lotte Shopping plunged 49 percent on-year to 87.3 billion won (US$78 million) in the April-June period.
Sales of the company, which runs Lotte Department Store and discount chain Lotte Mart, dipped 4.3 percent to 6.92 trillion won, with its bottom line nose-diving 95 percent to a mere 4.1 billion won.
Lotte Department Store saw its domestic sales decline due to the drop in Chinese customers, and revenue of its outlets in China sank 28.6 percent.
Sales of Lotte Mart, most of whose Chinese stores have been suspended by Beijing, fell 7.9 percent on-year in the second quarter, and the company posted an operating loss of 77 billion won. In particular, its Chinese sales plunged 94.9 percent.
Lotte Duty Free suffered a 20 percent drop in sales for the second quarter as revenue from Chinese tourists tanked 30 percent in the wake of China’s travel ban.
Other Lotte units, including Lotte Chilsung Beverage, Lotte Confectionery and Lotte Food, also suffered setbacks in the second quarter.
By Alex Lee and newswires (alexlee@heraldcorp.com)
