SEOUL, Dec 19, 2019, The Korea Herald. South Korea’s fifth-largest conglomerate Lotte Group carried out a sweeping executive reshuffle Thursday to respond to the changing retail business landscape, with Lotte Department CEO Kang Hee-tae being promoted as head of the retail business unit, The Korea Herald reported.
In a drastic annual year-end reshuffle, led by Lotte Group Chairman Shin Dong-bin, the group replaced a quarter of 608 senior executives, to brace for digital transformation amid the surge in e-commerce.
It was the first executive reshuffle led by Shin who came back to management after almost eight months of leadership vacuum since he was released from jail. On Oct. 5, a Seoul appeals court suspended his bribery and embezzlement sentence of Shin.
Of Lotte Group’s four major units — retail, hotel and service, food and chemicals — retail business expert Kang was promoted to vice chairman to lead the retail business unit, replacing former head Lee Won-joon.
But he will continue to hold the Lotte Shopping CEO role as the group has reorganized the retail unit under one joint corporation system by putting Lotte Department, Lotte Mart, Lotte e-Commerce and LOHB’s under Lotte Shopping.
To fill Kang’s vacancy, Lotte Home Shopping’s sales head Hwang Beom-seok has been appointed as Lotte Department Store’s new chief.
Under Chairman Shin’s order to become a “game changer” and a reorganized retail business division, the group named Lotte Home Shopping Executive Director to head Lotte Department Store, Lotte Mart Executive Director Nam Chang-hee to lead Lotte Super, Lotte Corp. Executive Director Cho Young-je to lead Lotte e-Commerce and Lotte Department Store Executive Director Hong Sung-ho to head Lotte LOHB’s.
For other retail subsidiaries, Lotte Home Shopping CEO and Vice President Lee Wan-sin has been promoted as president. Lotte Corp. Executive Director Ki Won-kyu has been appointed to Lotte Cultureworks CEO. Jeon Hyung-sik, until now the director at Lotte Department Store, now heads Lotte Members, while Korea Seven Director Choi Kyung-ho has been promoted to Korea Seven CEO.
Chairman Shin’s decision for a drastic executive shakeup follows weak sales of Lotte’s retail business this year, its main cash cow.
In the third quarter, Lotte Shopping, which runs the department store, super and other retail units, saw its operating profit fall by 56 percent on-year, which totaled 87.6 billion won ($75.2 million).
Due to expanded online shopping and continued nationwide boycott against Japanese brands, Lotte’s accumulated operating profit from January to September came in at 384.4 billion won, down 24.1 percent.
Meanwhile, Song Yong-deok, a top-ranking executive who has led Lotte’s hotel and service business unit, has been moved as vice chairman of the group’s holding company Lotte Corp.
Song will take the now-three-member top positions at the group’s control tower, assisting Chairman Shin and Vice Chairman Hwang Kak-kyu. Song will be in charge of major internal projects including corporate governance reform, listing of Lotte Hotel, internal audit and compliance. Vice Chairman Hwang will remain to supervise the group’s overall business agenda, M&A deals and communication, Lotte Group said.
Lotte Corp.’s CFO Lee Bong-Chul has been appointed as the new chief of Lotte’s hotel and service business unit, it added.
By Kim Da-sol