"Lotte's Bold Move" ... Appointment of Shinsegae Veteran as Head of Department Store

Since the beginning of the COVID-19 crisis, Shin Dong-bin, Chairman of Lotte Group, who had been calling for a "post-COVID" era, has finally taken decisive action. Half of the heads in charge of the group's core businesses have been replaced, and external recruits have been put at the forefront, signaling that the principles of "reward and punishment based on performance" and "breaking the bloodline system" are expected to expand throughout Lotte Group affiliates.

On the 25th at 9 a.m., Lotte Group held board meetings across its affiliates, including Lotte Holdings, to approve the regular executive appointments and organizational restructuring plans for the next year. Jung Jun-ho, CEO of Lotte GFR, was appointed as the new CEO of Lotte Department Store. Jung, originally from Shinsegae, was recruited when Lotte Shopping spun off Lotte GFR in 2018 to strengthen its fashion business. This is the first time the CEO of Lotte Department Store, a core business of the group, has been assigned to an external executive, reflecting the growing sense of crisis due to continued poor performance.

Kang Hee-tae, Vice Chairman and CEO of Lotte Shopping as well as head of the Distribution BU, will step down taking responsibility for the ongoing decline in performance and poor online business results. Lee Bong-cheol, head of the Hotel & Service BU, who was in charge of the hotel and duty-free businesses, will also be replaced due to the sharp drop in sales caused by COVID-19. The new head of the distribution division is expected to be an external recruit personally brought in by Chairman Shin. It is also reported that the successor to Lee will likely be an external hire rather than an internal Lotte Group executive.