Jung Junho, CEO of Lotte Department Store, Targets Shinsegae Hwaseong The Park "Doubtful About Development Feasibility"

Shinsegae's Financial Stability Worsens Due to Poor Performance
Raising 4 Trillion Won in Project Funds Expected to Be Challenging
Confident in Outperforming Nearby Time Villas Suwon in Competition

Jung Jun-ho, CEO of Lotte Department Store, expressed doubts about whether the Hwaseong International Theme Park complex development project (Starbay City), which Shinsegae Group is pushing forward with its fate on the line, can really be developed on a scale of 1 million pyeong considering their financial capabilities.

On the 23rd, at a mid- to long-term strategy briefing held in Jung-gu, Seoul, Jung said, "Our competitor announced that they are undertaking a large-scale project in Hwaseong," adding that it would not be easy for Shinsegae, whose financial stability has significantly deteriorated due to poor performance, to raise over 4 trillion won in project costs. Jung is originally from Shinsegae, having joined Shinsegae Department Store and served as vice president of Shinsegae International and the Chosun Hotel duty-free business division.

The large-scale project Jung referred to is the Hwaseong International Theme Park complex development project, into which Shinsegae is pouring its entire corporate capabilities. It is a project to build a futuristic advanced complex city on a 4,189,000㎡ (1.27 million pyeong) site within Songsan Green City, Hwaseong-si, Gyeonggi Province, with a total project cost reaching 4.5693 trillion won.

Lotte Department Store launched a new complex shopping mall brand called 'Time Villas' and reopened the Lotte Department Store Suwon branch, opening the first Time Villas store in May. This overlaps with the commercial area of Shinsegae Group’s complex shopping mall, Starfield Suwon.

Jung said, "Although the competitive market environment will continue, the location of our (Lotte) Suwon branch is the center of the Suwon commercial district," adding, "Lotte Department Store in the Suwon area did not have a premium image and failed to provide a service environment matching the customers’ level, causing customers to leave externally, but now those customers are being retained at our (Time Villas) Suwon store."

He particularly emphasized, "Currently, the number of customers at Starfield is much higher, but I believe the shopping value is greater among our customers," and added, "Things are progressing as we had planned."

Jung also stated, "Since switching to Time Villas Suwon, sales from new customers have increased by more than 40% compared to the previous year, and sales from metropolitan customers outside Suwon have expanded by over 20%. Sales per premium customer at AvenueL have also increased by nearly 90%," he reported.

At the briefing, Jung announced plans to invest 7 trillion won in the shopping mall business by 2030 to expand the number of Time Villas stores in Korea to 13. Regarding the massive investment scale, he said, "We plan to raise funds within the scope of our available capital and annual EBITDA. Although the burden from the poor performance of consolidated affiliates has been a concern, the deficit scale of Lotte On is decreasing, and things are being organized, so we will execute within the range of profitability."