Unionists of Lotte Duty Free on Monday urged Finance Minister nominee Yoo Il-ho to extend the state license to continue operating its Jamsil store in southeast Seoul for another five years from the scheduled shutdown in June.
Lotte lost the bid in November after the Korea Customs Service, a Finance Ministry affiliate, slashed the validity of the license to five years from the previous 10 years. Though the company promised job security for all 1,100 regular and temporary workers at the Jamsil store, rumors are rampant that only a handful will be able to keep their jobs.
“Duty-free business is a booming sector in Korea with more than 10 million Chinese tourists visiting every year mainly to shop. Lotte’s abundant business experience as well as skilled workers are an asset to the country’s economy,” said Moon Geun-sook, the labor union leader.
She called for the government to reinstate the validity of the license to 10 years, claiming that businesses will not break even with 8-9 percent operating profits in five years.
Lotte has other duty-free stores in Incheon and Gimpo airports as well as Coex in southern Seoul and downtown Jejudo Island. However, the future of two outlets remains uncertain, as the license for stores in Gimpo International Airport and Coex are to expire in April and early 2017, respectively.
Should they fail to retain the license the company may have to consider shutting down the business which posted more than 4 trillion won ($3.3 billion) in sales in 2015, pundits say.
Meanwhile, SK Networks, which was also stripped of the license in November, is planning to sell its warehouse, point of sales system, as well as 190 regular workers to Doosan, which has newly won the license. SK is scheduled to close its Walkerhill Duty Free by May.
Doosan has reportedly liquidated 304.6 billion won-worth Korea Aerospace Industries shares for the new business, which is expected to reinvigorate the cash-stripped conglomerate.
“The deal will be beneficial for both parties since Doosan is a novice in the retail business,” an industry insider said.
By Bae Ji-sook(firstname.lastname@example.org