(form left) President & CEO Lee Dong-woo of Lotte Corp.,; CEO & Executive Vice President Hwang Young-geun of Lotte Hi-Mart,; President & CEO Kim Hyun-soo of Lotte Rental,; CEO & Executive Vice President Chun Young-min of Lotte Accelerator,; President Yoon Jong-min of Lotte Man Power Development Institute,; Executive Vice President Lee Hoon-ki of Lotte Corp.’s Management Innovation Office,; and Vice President Chung Young-chul of Lotte Corp.’s chief of the staff. (Photos: Lotte Group)

Lotte Group convened an emergency board of directors’ meeting on Aug. 13 and conducted an unprecedented non-regular reshuffle.

Vice Chairman and CEO Hwang Gak-gyu of Lotte Corp., the second-highest executive of the group, resigned, and President Lee Dong-woo of Lotte Hi-Mart has been appointed to replace Hwang.

Vice Chairman and President Song Yong-duk of Lotte Corp. has been retained.

Vice Chairman Hwang tendered his resignation, taking responsibility for the dismal Q2 business performance of the group’s subsidiaries.

But Hwang’s concurrent position of the chairman of the board of directors of the holding company was retained.

Lotte Corp. will hold an extraordinary shareholders’ meeting on Oct. 8 to get the nod for the personnel changes.

The latest reshuffle may be construed as a shift in generations and Lotte Chairman Shin Dong-bin’s trust in newly appointed Vice Chairman and CEO Song of Lotte Corp., business analysts said.

Vice Chairman and CEO Song of Lotte Corp. entered Lotte Department Store and served as CEO of Lotte World.

He had served as president and CEO of Lotte Hi-Mart since 2015. He is evaluated to have been credited with making Lotte Hi-Mart, the sole subsidiary of the group, whose business performance has improved despite COVID-19 pandemic. Lotte Hi-Mart posted 1.115.7 trillion won in Q2 sales, a 4.2 percent up over the same period one year ago and 69.3 billion in operating profit, a 51.1 percent jump.

Lotte Corp.’s Management Strategy Office, in charge of the group’s future strategies, was reorganized into the Management Innovation Office, and CEO and Executive Vice President Lee Hoon-gi of Lotte Rental was appointed to head the office.

Hwang Young-geun, head of Lotte Hi-Mart’s Business Division, was promoted to the newly appointed CEO of the company.

Lotte Property & Development President & CEO Kim Hyun-soo was transferred to president & CEO of Lotte Rental while Lotte Property & Development CEO Ryu Jae-dong was named as chief of the staff at the Lotte Corp. secretariat.

President Jun Young-min of Lotte Elevator was appointed to be president of Lotte Manpower Development Institute.
Lotte Group’s Making a Fresh Start

Lotte Chairman Shin stressed the importance of on-the-spot management since he returned from Japan in early May. Starting to his tour to Lotte Department Store’s main outlet in Sogong-dong, Seoul, on May 17, Chairman Shin had made inspection tours on 13 occasions. He toured major distribution and chemical subsidiaries and told executives “not to be stuck to conventional mold.”

Of late, Lotte Group has been struggling with internal and external challenges. The group had to endure 2 trillion won in losses in the wake of China’s retaliation against the installation of U.S. Terminal High Altitude Area Defense (THAAD) in Korea.

Lotte was once shaken with a management right feud, and the group was hit by the spread of COVID-19 at the latest development.

The latest reshuffle of the group’s executives will likely prompt the group to redraw future strategies to seek out “game changing” advantages. Lotte Group plans to accelerate digital transformation.

Lotte Shopping, which operate Lotte Department Store outlets and large-sized marts, are staging an uphill battle against Naver, Coopang and other new-comer distribution juggernauts.

Chairman Shin has repeatedly ordered the strengthening of online channels. The major takeaway of the move is the inauguration of the group’s integrated online mall “Lotte On.”

The group is making preparations for reversing course to an offensive move like the development of its own search engine by hiring engineers, who had been with Naver.

Lotte Group envisages the establishment of a big data eco-system covering distribution, chemical, food & beverages, and other units of the group. The group aims to raise online sales to 20 trillion won by 2023.