[Click eStock] "Lotte Shopping, Performance Decline Inevitable Due to COVID-19... Full-Scale Restructuring Needed"

[Asia Economy Reporter Koo Eun-mo] It is anticipated that Lotte Shopping's poor performance will be unavoidable for the time being due to the novel coronavirus disease (COVID-19) crisis. It is diagnosed as a time when full-scale restructuring is necessary.

On the 27th, Mirae Asset Daewoo predicted that Lotte Shopping's poor performance and stock price decline would continue for the time being due to the COVID-19 crisis. Researcher Kim Myung-joo of Mirae Asset Daewoo stated in a report, "Sales decline due to COVID-19 is inevitable as major department stores such as the main branch and Yeongdeungpo branch temporarily close and consumption shifts to online," adding, "The negative growth rate of discount stores and supermarkets in the first quarter is expected to slightly expand, and department stores are expected to experience negative growth."

It is diagnosed as a time when full-scale restructuring is necessary. Researcher Kim said, "Over the next three years, Lotte Shopping plans to carry out restructuring targeting about 200 stores including discount stores, supermarkets, and LOHB's," and analyzed, "Since most of the targeted stores are estimated to be leased stores, if restructuring centered on the headquarters is in full swing, Lotte Shopping's profit and loss improvement and full-scale stock price recovery are expected."

Although a reduction in scale will be inevitable once restructuring is in full swing, it is expected that the decrease in offline scale will be offset through online channels in the future. Researcher Kim said, "In this process, the utilization of offline assets will also increase," citing the Junggye branch and Gwanggyo branch, which are scheduled to open next month as representative examples of digital fulfillment stores.

This content was produced with the assistance of AI translation services.