Operating Loss of 11.1 Billion KRW
Reduced by About 5 Billion from Last Year's 16 Billion
"Structural Improvements to Strengthen Competitiveness Proving Effective"
Lotte Hi-Mart continued to post a loss in the first quarter of this year, but managed to reduce its operating loss by nearly 5 billion KRW through efficiency measures such as workforce restructuring and store renovations.
On May 7, Lotte Hi-Mart announced in a regulatory filing that its consolidated operating loss for the first quarter of this year was 11.1 billion KRW, a decrease of 31.0% (about 5 billion KRW) from the loss of 16 billion KRW in the same period last year, according to preliminary figures. Taking into account one-off costs of around 3 billion KRW related to a Supreme Court ruling on ordinary wages, the actual deficit was reduced by approximately 7.9 billion KRW compared to the same period last year.
During the same period, sales reached 529 billion KRW, up 0.7%. This marks the first time in three years and seven months, since July 2021, that Lotte Hi-Mart's sales have returned to growth, and the first quarterly increase since the first quarter of 2021. The company analyzed, "Company-wide efforts to strengthen competitiveness are proving effective, including 'securing human expertise' through workforce restructuring, 'expanding customer touchpoints' through Hi-Mart Anshim Care, and 'enhancing competitiveness through store renovations' by actively applying new strategies at the store level."
The company has set a plan to maintain this upward trend through future growth strategies such as home appliance subscription services and private brand (PB) products this year. First, it aims to further expand the scope of 'lifetime care for appliance life' through 'Hi-Mart Subscription.' On May 1, Lotte Hi-Mart launched Hi-Mart Subscription, entering the home appliance subscription market. Leveraging its position as a multi-brand electronics retailer, it will introduce a variety of international brands such as Apple, Roborock, and Dyson?which were previously unavailable through existing subscription services?and differentiate itself by offering new products such as electric rice cookers and food waste disposers.
Last month, the company launched a new PB brand, 'PLUX.' Targeting small households of one to two people, it will offer home appliances with a focus on cost-effectiveness (performance relative to price). In addition, Lotte Hi-Mart plans to strengthen collaboration through 'appliance consignment sales' at large furniture and interior dealerships. On April 25, the company opened its first consignment sales dealership, 'Hi-Mart Built-in,' at a Hanssem dealership in Busan, and plans to expand to ten locations within the year.
In February, Lotte Hi-Mart announced its annual results for 2024 and set targets of 2.3 trillion KRW in sales and 10 billion KRW in operating profit for this year. A Lotte Hi-Mart representative said, "Although we expect the unfavorable business environment to continue this year, we will achieve our annual targets through the effects of fundamental structural improvements and new growth strategies that will accelerate these changes."
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