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(LEAD) Lotte Shopping delivers 'earnings shock' in Q1 amid coronavirus pandemic

All News 16:26 May 14, 2020

(ATTN: CHANGES headline, lead; ADDS more info from 2nd para, photo)

SEOUL, May 14 (Yonhap) -- Lotte Shopping Co., the operator of South Korea's biggest department store and a leading discount store, said Thursday it swung to the red in the first quarter, mainly due to an industry-wide slump caused by the novel coronavirus outbreak.

The key unit of retail giant Lotte Group reported a net loss of 43.3 billion won (US$35.3 million) on a consolidated basis for the January-March period, shifting from a profit of 109.2 billion won a year earlier.

Corporate logo of Lotte Shopping Co. (PHOTO NOT FOR SALE) (Yonhap)

It posted 52.1 billion won in operating profit for the quarter, compared with 205.3 billion won a year ago.

Its sales fell 8.3 percent on-year to 4.07 trillion won in the first quarter.

The company attributed the grim business results to fewer people visiting offline stores and more staying at home during the COVID-19 pandemic

"Most local retail companies were faced with difficulties due to worsened consumer sentiment," said a company official who asked not to be named. "We will try to strengthen the e-commerce environment through Lotte On."

Lotte Shopping joined a list of traditional retailers that have announced a slew of drastic and painful restructuring measures after delivering poor earnings in the face of harsh competition with e-commerce players.

Last month, Lotte Shopping launched an ambitious online shopping website, Lotte On, which integrates the websites of Lotte's eight affiliates, including Lotte Department Store, the electronics unit Himart, Lotte Home Shopping and Lotte Duty Free.

Shares of Lotte Shopping closed at 89,000 won, up 0.56 percent from a day earlier. The earnings were announced after the local market closed.

khj@yna.co.kr
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