Lotte buys shares of its subsidiaryLotte Corporation purchased 200,000 shares of its subsidiary Lotte Shopping in a bid to help recover its struggling retail businesses.
Lotte Corporation on Thursday posted that it bought 0.71 percent of Lotte Shopping’s common shares from Aug. 23 through Thursday. The holding company of most Lotte subsidiaries in Korea now has 39.50 percent claim over Lotte Shopping, with 11,174,799 shares.
“We bought the shares as part of our responsibility management as a holding company,” said a spokesperson for Lotte Corporation. “Situations for our subsidiaries aren’t so good. A lot of their shares have been sold.”
Lotte Shopping has the group’s retailing units, including Lotte Mart, Lotte Department Store and Lotte Super, under its arm.
Lotte’s latest decision arrived several weeks after Lotte Shopping’s sluggish second quarter posting that went public earlier this month. Lotte Shopping posted 91.5 billion won ($81.7 million) in operating profit, a 5.7 percent increase on year, but its operating profit in the first and second quarters combined this year inched down 3.5 percent on-year to stand at 296.8 billion won.
Although Lotte Shopping managed to pull up the overall operating profit from its department store sales, its discount store chains dragged down the performance. Lotte Mart posted a 34 billion won loss while Lotte Super posted a 20 billion won loss in the April-June period.
The intense competition spurred by the appearance of e-commerce websites and the boycott against Japanese brands since last month are said to have aggravated the retail industry in Korea. This resulted in the general fall in Lotte Shopping’s share price.
Its rival Emart announced earlier this month that it will buy back its own shares.
BY JIN MIN-JI [firstname.lastname@example.org]
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