SOUTH KOREA. Lotte Duty Free has posted a +29% year-on-year sales increase in the first half of 2018 (excluding Busan downtown and airport sales), to KRW2,700.9 billion (US$2.39 billion).
Sales in South Korea rose +29% to KRW2,639.9 billion (US$2.34 billion).
In profitability terms, Lotte noted that its rent burden had decreased following its exit from Incheon International Airport Terminal 1 cosmetics, fashion and leathergoods contracts.
In the wake of the withdrawal, Lotte said it was conducting “aggressive marketing” at its downtown stores and online duty free shops. This includes its ‘Yum’ brand advertising campaign and a series of cosmetics brand VIP events in its Star Lounge at its flagship downtown store in Myeong-dong, Seoul. The first event took place in early August, in partnership with YSL Beauté.
Lotte said that as a result of these initiatives, downtown duty free shops posted a +44% rise in sales, while online sales were up +50%.
Total operating profit reached KRW155 billion, a strong rebound from what Lotte described as “a major crisis in the first half of 2017, including a deficit in the second quarter of last year”. Operating profit has recovered to pre-crisis levels, according to the retailer.
Offshore sales grew +60% year-on-year to reach KRW97 billion (US$8.6 million). Lotte said it now expected full year sales to reach KRW200 billion (US$177.2 million).
The retailer currently has seven overseas branches in operation, and said it was considering additional openings in the second half of this year in Vietnam and other countries.
