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.
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.
Lotte Group Chairman Shin Dong-bin (Yonhap)
It was the first executive reshuffle led by Shin who came back to management after almost eight months of leadership vacuum when he was in jail. On Oct. 5, a Seoul appeals court suspended his bribery and embezzlement sentence.
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.
Lotte Group's retail BU head Kang Hee-tae (Lotte Group)
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 the 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 as 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 of 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. Vice Chairman Hwnag Kak-kyu (left) and Song Yong-deok (right) (Lotte Corp.)
Lotte Corp.’s CFO Lee Bong-Chul has been appointed as the new chief of Lotte’s hotel and service business unit, it added.
For its chemical business unit, Lotte Group has promoted Lotte Chemical Executive Director Kim Yong-seok to Lotte BP Chemicals CEO, as well as Lotte Fine Chemical Executive Director Chung Kyung-moon to its CEO.
For the food business unit, Lee Kyung-hwon, executive director of Lotte R&D Center, has been promoted as its CEO.
Lotte Group has also added three more women executives in the latest reshuffle, by promoting the group’s marketing service company Daehong Communication’s strategy solution team leader Yang Su-kyung, Hotel Lotte’s marketing division head Jang Yeo-jin and Lotte World’s Seoul sky operation team leader Park Mi-sook.
By Kim Da-sol (email@example.com