Store to close after 19 years as profitability concerns mount; Lotte shifts to 'selection and concentration' strategy

The exterior of Lotte Department Store's main branch. This image is unrelated to the article. [Lotte Department Store]
The exterior of Lotte Department Store's main branch. This image is unrelated to the article. [Lotte Department Store]

Lotte Department Store's Busan Centum City branch will close after 19 years of operation. Lotte Department Store announced Thursday that it has decided to sell the branch's assets and shut down operations, citing the need to adapt to a rapidly changing retail environment through a "selection and concentration" strategy.

The Centum City branch opened in 2007 and grew into a major retail hub in eastern Busan, but the store has hit a wall in terms of growth and profitability amid shifting market conditions. Lotte Department Store said it concluded that restructuring its portfolio and concentrating resources on key growth locations would be the more efficient path forward.

Shinsegae Co. will acquire the property. The transaction is subject to a business combination review by the Korea Fair Trade Commission and other regulatory procedures before it can be finalized. The branch's closing date will be set after those reviews are complete. The Busan Centum City branch will continue normal operations until the deal closes.

Lotte Department Store said it plans to notify customers, employees and partner brands in advance before the closure. For employees, the company said it will first explore reassignment options within the Busan market. The company also plans to support partner brands in transitioning their operations smoothly in accordance with their contract terms.

In addition, Lotte Department Store is preparing a full-floor renovation of its Busan main branch, aiming to strengthen the store's competitiveness and boost the local retail market. The Busan main branch, which opened in 1995, has drawn attention as the city's flagship department store after sales to foreign visitors surged more than 150 percent this year. Lotte also plans to enhance the merchandise mix at Lotte Mall Dongbusan, located in the Osiria tourism complex.

Lotte Department Store has already been channeling concentrated investment into its major stores nationwide. Its Incheon and Nowon branches completed full-floor renovations this year, while the Jamsil branch launched a phased renovation this month, beginning with the food hall. The flagship main branch is undergoing a renovation set to debut a large media facade called "Lotte Town Light" along with a heritage-themed space later this year. The company also recently opened a new-concept shopping mall, Lotte Mall Bellytaown Cheongnyangni, at its Cheongnyangni location.

"We plan to open large-scale retail facilities in Daegu Suseong, Seoul Sangam, Incheon Songdo and Jeonju in North Jeolla Province," Lotte Department Store said, adding that it will continue to invest steadily in key regions.


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