Lotte duty-free ambitions hinge on South Korea store license
By Joyce Lee
SEOUL (Reuters) - Five bidders covet three lucrative downtown duty free licenses to be issued by South Korea on Saturday, and arguably none is more desperate for a win than Lotte Duty Free.
The world's No.3 duty-free retailer's ambitions to one day become the world’s biggest operator were thwarted this year by a criminal investigation that forced its parent Lotte Group to scrap a multi-billion-dollar IPO.
A win on Saturday would allow the beleaguered South Korean conglomerate to reopen a Seoul mega-store and revive its goal of global duty-free dominance.
Failure would not only keep the store shuttered, it would curb enthusiasm for the planned $4.5 billion initial public offering of Lotte Group's hotel business, designed in part to help fund expansion in duty free.
"If Lotte is chosen, it's expected to have a positive influence on Hotel Lotte's planned IPO, which is the centrepiece of Lotte Group's announced target of turning into a holding company structure," said Yang Ji-hye, retail analyst for Meritz Securities.
South Korea's customs agency will decide the winners of three new duty-free licenses for large companies in Seoul on Saturday, adding new stores to the world's largest duty-free market worth $7.9 billion last year.
Other participants in the auction include Samsung Group's Hotel Shilla Co Ltd 008770.KS joint venture, Shinsegae Inc 004170.KS, Hyundai Department Store Co Ltd (069960.KS: Quote) and SK Networks Co Ltd 001740.KS.
South Korea's fifth-largest business group, Lotte has invested a huge amount of energy in regaining the license that it failed to renew six months ago, around the time that prosecutors revealed they were investigating the group. Continued...