Lotte Duty Free registered sales of KRW2,700.9bn ($2.4bn) – an increase of 29% year-on-year – and operating profit of KRW155bn ($137m) in the first half of 2018 excluding its operations in Busan.

 

According to Lotte, the bump in sales is due in part to decreased rent payments, as the company exited three out of four loss-making contracts at Incheon International Airport, at the end of last month,

 

The company has been compensating for the store closures with an aggressive marketing strategy, which is being conducted at downtown stores and online, in order to retain customers.

 

The company recently launched a high profile ‘Yum’ brand advertising campaign in June and carried out a three-day beauty event in collaboration with L’Oréal Travel Retail Asia Pacific from 1-3 August at the retailer’s main store in Myeong-dong, Seoul. According to Lotte, this is just one of numerous downtown events which are to follow.

 

ONLINE SALES GROW 50%

As a result of the aforementioned campaign and activation, duty free sales in the city increased by 44% year-on-year and online duty free sales grew by 50%.

 

 

As previously reported, Lotte registered first quarter revenue of KRW1,262.9bn ($1,175.8bn) in 2018, with a strong push from its overseas business in Vietnam.

 

However, figures for both the first and second quarters of this year may seem more flattering this year due to the ‘major crisis’ Lotte had to endure last year. As was reported this time last year, Lotte confirmed to TRBusiness, a loss of KW29.7bn ($26.1m) during its second quarter reporting period (April-June), with the decrease in sales caused mainly by the collapse of organised Chinese tours due to the THAAD missile issue.

 

 

Later on that year, a Lotte spokesperson predicted a recovery in the second quarter of 2018: “We are just hoping the situation will improve gradually and expecting to see the rebound of [the] market after or around the second quarter of next year,” he said.

 

This year, Lotte highlights its withdrawal from Incheon as well as the stability of its operations overseas, as the reasons for a more positive performance in 2018.

 

Overseas operations – which number seven currently – reportedly generated KRW97bn in the first half of this year and sales are expected to reach KRW200bn by year-end.