SEOUL—Lotte Shopping Co., part of the retail conglomerate Lotte Group, has reported a significant net loss in the second quarter, attributing the downturn to substantial liquidation losses from its operations in China. The company announced a shift from a net profit last year to a loss this quarter, highlighting ongoing challenges in the region.
According to Yonhap News Agency, Lotte Shopping recorded a net loss of 79.68 billion won (approximately US$58 million) for the quarter ending June, a sharp decline from a net profit of 116.55 billion won in the same period last year. "The company suffered more than 70 billion won in business liquidation losses, which were factored into the quarterly bottom line," the spokesperson explained via telephone. The retail sector has faced sustained sales declines partly due to a diplomatic rift with Beijing over South Korea's 2017 deployment of the THAAD missile defense system, which China opposes.
Despite the net loss, Lotte Shopping reported an 8.9 percent increase in operating profit to 56.06 billion won for the quarter. However, sales dipped by 5.4 percent to 3.43 trillion won from 3.62 trillion won a year earlier. For the first half of the year, the company also reported a net loss of 6.8 billion won, compared to a net profit of 174.33 billion won in the previous year. Lotte Shopping remains a major player in South Korea's retail market, operating the largest department stores and the third-largest discount store chain in the country.