Lotte Group, recently plagued by rumors of a liquidity crisis, is gearing up for its annual executive reshuffle.
Industry insiders expect a sweeping shake-up as the group grapples with prolonged struggles in its core retail and chemical businesses, compounded by this year’s emergency management declaration. Speculation is also swirling that the group may expedite the reshuffle to counter mounting rumors.
On Nov. 18, Lotte Corp., Lotte Shopping, and Lotte Chemical issued public statements denying the rumors, dismissing them as unfounded. The statements followed a Nov. 16 YouTube video titled “Lotte Group on the Brink of Collapse,” which sparked a wave of speculation across financial market bulletins.
The rumors alleged that the group would declare a debt default next month and slash over half its workforce in retail subsidiaries.
Lotte has strongly refuted these claims and is exploring legal action against those responsible for spreading the rumors. Despite this, the group’s stock prices have taken a hit. Between Nov. 15 and Nov. 20, shares of Lotte Corp. fell 6.6%, Lotte Shopping dropped 9.0%, and Lotte Chemical plummeted 11.4%.
This isn’t the first time Lotte has faced unfounded speculation during its annual reshuffle season, a pattern that has emerged since 2021. While most rumors have been dismissed as baseless, the group’s recent financial difficulties have fueled greater unease.
With both its retail and chemical businesses underperforming, Lotte’s total market capitalization has shrunk from approximately $14.2 billion at the end of 2022 to about $9.2 billion as of Nov. 13. Over the same period, Lotte’s ranking among South Korea’s largest conglomerates by market value slipped from 12th to 16th.
Lotte Corp. declared emergency management measures in August, and several subsidiaries—including Lotte On, Korea Seven, and Lotte Duty-Free—are currently conducting voluntary retirement programs. Additionally, executives at Lotte Corp., Lotte Chemical, and Lotte Fine Chemical have begun returning up to 30% of their salaries this month.
The upcoming reshuffle is expected to prioritize bold reforms, particularly in underperforming subsidiaries. Last year’s reshuffle saw Lotte replace 14 CEOs, signaling the group’s willingness to make significant changes.
Among the executives whose terms expire in March 2024 are Lee Dong-woo, vice chairman and CEO of Lotte Corp.; Lee Young-goo, vice chairman and CEO of Lotte Wellfood; Kang Sung-hyun, senior vice president and CEO of Lotte Mart and Lotte Super; Nam Chang-hee, senior vice president and CEO of Lotte Hi-mart; Hwang Jin-goo, senior vice president and CEO of Lotte Chemical’s basic materials division; and Kim Ju-nam, executive vice president and CEO of Lotte Duty-Free.
Eyes are also on Shin Yu-yeol, a third-generation member of the founding family and managing director of Lotte Corp.’s Future Growth Division. Shin has been gaining prominence within the group, having been appointed to the board of Lotte Biologics in February and to Japan’s Lotte Holdings in June. These moves highlight his growing influence in the company’s future direction.
