April 20, 2024
Retail & Consumer
Lotte Duty Free seeks rent cut at Incheon airport
[THE INVESTOR] Lotte Duty Free, Korea’s top duty-free operator, said on Sept. 13 it has asked the operator of Incheon International Airport to adjust its rental fees.
Last week, Lotte said it was reviewing the option of withdrawing from the country’s main gateway, located west of Seoul, if the airport operator refuses to cut the rent to help it weather a fall in the number of Chinese tourists.
“We have officially requested on Sept. 11 that IIAC reasonably adjust the lease fee,” the company said in a press release. “We are again trying to discuss the issue with IIAC to avoid the worst-case scenario of discontinuing our business at the airport.”
It has asked the airport operator to come up with a schedule for consultations within a week.
In 2015, Lotte Duty Free agreed to a five-year deal to pay rent totaling 4.1 trillion won (US$3.6 billion).
Under the new proposal, Lotte insisted that the IIAC change the way it pays rent to reflect sales as it cannot pay rent for the remaining period of the five-year contract due to drastic changes in the business climate, including a plunge in the number of Chinese tourists.
By Alex Lee and newswires (alexlee@heraldcorp.com)
Last week, Lotte said it was reviewing the option of withdrawing from the country’s main gateway, located west of Seoul, if the airport operator refuses to cut the rent to help it weather a fall in the number of Chinese tourists.
“We have officially requested on Sept. 11 that IIAC reasonably adjust the lease fee,” the company said in a press release. “We are again trying to discuss the issue with IIAC to avoid the worst-case scenario of discontinuing our business at the airport.”
It has asked the airport operator to come up with a schedule for consultations within a week.
In 2015, Lotte Duty Free agreed to a five-year deal to pay rent totaling 4.1 trillion won (US$3.6 billion).
Under the new proposal, Lotte insisted that the IIAC change the way it pays rent to reflect sales as it cannot pay rent for the remaining period of the five-year contract due to drastic changes in the business climate, including a plunge in the number of Chinese tourists.
By Alex Lee and newswires (alexlee@heraldcorp.com)
