What: Following a major leadership reshuffle and mounting concerns over its financial stability, Lotte Group convenes 80 executives to discuss cost-cutting measures and strategic initiatives, including the potential sale of non-core assets and overseas duty-free operations.

Why it is important: The restructuring effort highlights the challenges facing diversified retail groups as they balance ambitious growth plans with financial stability amid changing consumer behaviors and economic uncertainties.

Lotte Group's first-half "value creation meeting" will bring together 80 executives, including Chairman Shin Dong-bin, to address growing market uncertainty and financial concerns. This follows November's sweeping leadership changes, which saw 21 CEO replacements across affiliates and subsidiaries. The company's financial stability has been questioned due to poor performance in its chemical and retail divisions. In response, Lotte has announced plans to use its flagship Lotte World Tower, valued at 6 trillion won ($4.3 billion), as collateral for corporate bonds issued by Lotte Chemical. The group's strategy includes divesting non-core assets and withdrawing from overseas duty-free operations. Chairman Shin's New Year's message emphasised the need for preemptive financial strategies and new business models to achieve "meaningful results" in 2025.

IADS Notes: Following accelerated asset sales and revised growth targets, the company faces challenges in both its retail and chemical subsidiaries. While the group announced ambitious expansion plans earlier, including a $5 billion investment in new malls, recent market conditions have forced a strategic recalibration focused on financial stability.

Lotte Group to discuss cutting costs at upcoming executive meeting