Lotte Group’s retail business suffered the worst-ever slump this year as it lost the control of the domestic distribution market to e-commerce players. Announcing an annual executive reshuffle on Dec. 19, the group also disclosed a sweeping reorganization plan for its distribution business unit (BU), one of the group’s four business units. The other three are hotel and service, food and chemical.
Lotte Shopping, the flagship of Lotte Group’s distribution business, currently have five affiliates, one each for the department store, mart, supermarket, e-commerce, and LOHB’s business sector. LOHB's stands for Lotte Health and Beauty Store, a new breed of health and beauty brand.
These affiliates have been independently operated under their own CEOs. But these affiliates will be turned into business divisions of Lotte Shopping and put under the control of its head. The five business divisions will be managed by newly appointed division managers.
Lotte Group hopes that the reorganization will help the distribution BU reform itself by allowing it to establish future growth strategies more efficiently and implement reform more speedily by reducing decision-making steps.
A big change was made in the top executives of the five divisions. The heads of all four divisions were replaced except for Moon Young-pyo who was retained as the head of Lotte Mart. The heads of all four divisions were born in the 1960s. It is a signal that the company will successfully complete its online business expansion, a key task in Lotte’s distribution business, by injecting new vitality in the organization.