Lotte Duty Free to offer voluntary retirement scheme among other cost-cutting measures
Published: 25 Jun. 2024, 19:03
Updated: 25 Jun. 2024, 20:42
In his message to employees, Lotte Duty Free Chief Executive Kim Ju-nam said the company will offer a voluntary retirement program, a 20 percent salary cut for all executives and a reorganization of businesses in the face of deteriorating profitability, according to a statement released by the company.
"The company has endured the tough times following the COVID-19 pandemic. But the growth has stopped and profitability has deteriorated due to inflation, a weak won and other sudden changes in external [business] environments," Kim said.
The company is pre-emptively taking emergency steps to ride out the imminent crisis and regain market leadership in the duty-free shop industry, he said.
The emergency plan includes adjusting marketing expenses, streamlining operations and reducing the sales floor space to enhance efficiency and profitability.
"The number of incoming tourists has increased after the pandemic, but their main purpose of their travel is to visit tourism sites and experience Korean culture and food," a company spokesman said over the phone.
Among others, the lack of shopping-focused group tourists from China mainly affected the company's bottom line in recent years, he said.
Lotte Duty Free reported operating losses for three consecutive quarters through the first quarter of this year, with its accumulated net losses reaching 53.7 billion won ($38.6 million) during the cited period.
Lotte Duty Free currently operates a total of 21 duty-free shops in seven countries, including seven in South Korea.
Three other major duty-free shops — Shilla Duty Free, Shinsegae Duty Free and Hyundai Duty Free — also suffer sluggish sales amid unfriendly market conditions.
Yonhap
with the Korea JoongAng Daily
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