Lotte Department Store will sell its Busan Centum City branch and concentrate investments on key locations such as the Jamsil branch and the Busan flagship store. The company is streamlining stores deemed to have limited profitability potential, while directing resources toward high-growth opportunities through renovations and shopping mall expansions.
Lotte Department Store announced on the 29th that it will sell the assets of the Centum City branch to Shinsegae and cease operations at the location. The company explained that changes in customer demand and market conditions had limited the growth and profitability potential of the Centum City branch.
Although it considered measures to enhance the store's competitiveness, it determined that selling the asset and focusing resources on growth hubs would be more efficient when considering asset value and business viability.
The sale of the Centum City branch is less about shrinking Lotte Department Store's Busan operations and more about redefining the role of each store. Lotte Department Store began its regional business in 1995 with the opening of the Busan flagship store. The company plans to continue investing in the Busan flagship store and the Lotte Mall Dongbusan branch located in Oasia Resort.
Unlike the Centum City branch, the Busan flagship store has seen foreign sales increase by more than 150% this year, reflecting expanding tourist demand. This month, it opened an Intellectual Property (IP) specialty hall and plans to proceed with a full-store renovation in phases. The Lotte Mall Dongbusan branch, located in the Oasia Resort area, will also strengthen its merchandise planning (MD).
Expanded investments in key stores are not limited to Busan. Lotte Department Store completed full-store renovations at its Incheon and Nowon branches this year, while the Jamsil branch began a full-store renovation this month, starting with the food hall.
The flagship store currently under renovation will unveil a large-scale media facade titled 'Lotte Town Light' and a space showcasing Lotte's history by the end of the year. These moves aim to adjust facilities and product assortments according to each store's commercial district and customer demand to boost foot traffic.
The shopping mall business, beyond department stores, is also being cultivated as a new growth pillar. Recently, the company opened the shopping mall 'Lotte Mall Valley Town Cheongnyangni' at its Cheongnyangni branch. It plans to develop large-scale shopping facilities in Daegu Suseong, Seoul Sangam, Incheon Songdo, and Jeonju in North Jeolla Province.
The strategy is to diversify its business portfolio by increasing the competitiveness of traditional department store branches while expanding shopping facilities tailored to regional consumer demand.
With the sale of the Centum City branch as a turning point, Lotte Department Store plans to focus on investing in key stores and strengthening the competitiveness of each location.
However, the closure of the Centum City branch's operations will be finalized only after related procedures, such as the Fair Trade Commission's review of the business combination, are completed. Until the transaction is closed, the store will operate normally. The company will prioritize reviewing internal transfers for employees within the Busan commercial district and consult with tenant partners regarding operational transitions.
A Lotte Department Store official said, "This decision aims to enhance management efficiency and sustain long-term growth through the restructuring of assets and our store portfolio." The official added, "We plan to strengthen the competitiveness of stores in the Busan region and contribute to revitalizing local commercial districts."
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