[Clockwise from left] Dong-woo Lee, CEO of Lotte Holdings; Young-koo Lee, CEO of Lotte Wellfood; Sang-hyun Kim, CEO of Lotte Shopping; Hyun-chul Park, CEO of Lotte Construction. / Photo courtesy of Lotte Group. Lotte Group will conduct its regular executive reshuffle on the 28th. With struggling performance from Lotte Chemical and rumors of liquidity crises, attention is on Chairman Shin Dong-bin’s decisions. As the group embarks on an earlier-than-usual reshuffle and organizational restructuring, it is expected that the focus will be on rejuvenation efforts to overcome these challenges.
On the 28th, according to the business community, Lotte Group will announce its 2025 regular executive reshuffle after holding board meetings for each affiliate at Lotte World Tower in Jamsil, Seoul. Unlike the previous two years when the reshuffle occurred in early to mid-December, this year it has been moved up to November.
The extent of change among the leadership of major affiliates, including the holding company, is a key point of interest. CEOs with terms ending later this year or in March next year include Dong-woo Lee, CEO of Lotte Holdings (Vice Chairman); Young-koo Lee, CEO of Lotte Wellfood (Vice Chairman); Hyun-chul Park, CEO of Lotte Construction (Vice Chairman); Sung-hyun Kang, CEO of Lotte Mart and Super (Vice President); Chang-hee Nam, CEO of Lotte HiMart (Vice President); Jin-goo Hwang, CEO of the Basic Materials Business at Lotte Chemical (Vice President); and Joo-nam Kim, CEO of Lotte Duty Free (Executive Vice President).
With the group entering emergency management centered around the holding company, there is speculation that the leadership of major affiliates may undergo significant changes. Particular attention is on the future of Lotte Chemical’s executives, given it was at the center of the group’s liquidity crisis rumors. Lotte’s chemical sector includes Lotte Chemical, Lotte Fine Chemical, Lotte Energy Materials, Lotte Aluminum, and Lotte Energy Materials-K.
The reshuffle of four vice-chairmen is another focus point. Aside from Vice Chairman Sang-hyun Kim, who concurrently serves as General Manager of Lotte Group’s Retail Business Unit HQ and CEO of Lotte Shopping, the terms of the other three vice-chairmen, including Dong-woo Lee, Young-koo Lee, and Hyun-chul Park, are set to expire.
Dong-woo Lee took over the holding company’s CEO position following Gak-gyu Hwang, who advised Chairman Shin for many years. He is known for leading the launch of Lotte Biologics and Lotte Healthcare. However, concerns have been raised because Lotte Biologics has turned a deficit, and Lotte Healthcare is undergoing partial business withdrawals, highlighting a lack of rapid execution in group-wide refreshment under the emergency management system.
Speculation arises that Vice Chairman Lee may be removed to show Chairman Shin’s commitment to rejuvenation. However, some believe a wholesale change in the upper management, including the vice-chairmen, could delay business restructuring as it would take time to reorganize the leadership.
The Retail Business Unit is expected to maintain its current leadership, considering the restructuring framework it established through significant self-improvement efforts over the past few years. Vice Chairman Kim, who was an external hire brought in with Chairman Shin’s considerable effort, is praised for helping to change the conservative corporate culture within Lotte’s Retail Business Unit. Lotte Shopping is advancing a 1 trillion won project in partnership with UK-based Ocado to strengthen its online grocery business, with the first logistics center under construction in Busan and plans for a second underway.
Lotte Department Store has embarked on its mid-to-long-term growth strategy with the complex shopping mall ‘Time Villas’. Meanwhile, Seven-Eleven has completed the integration of Ministop and is focusing on strengthening product development.
While Lotte Shopping’s operating profit decreased from 801 billion won in 2017 to 207.6 billion won in 2021, it began recovering in 2022, reaching 508.4 billion won last year. Although sales have been declining every year since 2017, there’s a high chance of a rebound beginning this year.
There is speculation that leaders like Jun-ho Jung, CEO of Lotte Department Store, will also largely remain in their positions. However, Sung-hyun Kang, who has led Lotte Mart and Super for four years, and Chang-hee Nam, whose term at Lotte HiMart is nearing its end, may be reassigned, potentially leading to a series of executive reshuffles in the retail sector. Joo-nam Kim, CEO of Lotte Duty Free at Hotel Lotte, is also rumored to be replaced.
There is optimism that Young-koo Lee, CEO of Lotte Wellfood, who serves as General Manager of the Food Business Unit HQ under the transnational ‘One Lotte’ strategy, will be reappointed due to his efforts in leading Lotte Wellfood’s global market expansion.
The potential promotion of Shin Dong-bin’s eldest son, Yu-yeol Shin, to Managing Director is also a focal point. Born in 1986, Shin was promoted last year to Future Growth Center Director at Lotte Holdings. His influence within the group has expanded with appointments as internal director of Lotte Biologics in March and Lotte Holdings in Japan in June.
The generational shift within the retail sector is already underway. Shin Dong-won of Nongshim’s son and daughter received promotions this year, advancing third-generation management, while GS Retail promoted Seo-hong Heo, a fourth-generation owner, to Director of Management Strategy SU.
Projections indicate that executives across various affiliates may see reductions of 10% to 30%. Restructuring efforts like voluntary retirements are already underway at Lotte ON, Lotte Duty Free, Korea Seven, and Lotte Hotel & Resort. Executives at Lotte Holdings and Lotte Chemical have agreed to voluntarily return 10% to 30% of their salaries starting this month.
There also seem to be plans to hasten the streamlining of underperforming businesses. In an interview with Yomiuri Shimbun earlier this year, Chairman Shin expressed that it’s better for employees if unsuccessful businesses over several years are transferred to other companies, hinting at the potential divestiture of struggling ventures.