Jung Junho, CEO of Lotte Department Store, Announces First Organizational Restructuring... Strengthening Expertise and Integrating Regional Headquarters

[Asia Economy Reporter Jo In-kyung] Jung Jun-ho, CEO of Lotte Department Store (photo), announced his first organizational restructuring plan just six weeks after taking office. The department store and outlet divisions will be separated to enhance specialization, and the food division will be separated from the existing merchandise headquarters to be placed directly under the CEO.

According to Lotte Department Store on the 10th, CEO Jung announced the restructuring plan himself through a video posted on the internal network on the 7th. This is the first time a CEO at Lotte Department Store has directly explained the background and purpose of personnel and organizational restructuring to employees.

The core of this restructuring plan is focused on transforming into a customer-centric department store by strengthening expertise. First, the management organization, which was previously divided into three 'regional units'?Capital Region Headquarters 1 and 2 and Yeonghonam Headquarters?was integrated into one. CEO Jung judged that the three regional headquarters had been operating independently, which weakened their negotiation power with external brand companies. While department store management was unified, the outlet division was separated. The strategy is to strengthen product composition according to the characteristics of each channel.

The food division, which was included in the merchandise headquarters under the Capital Region Headquarters, was also separated and placed directly under the CEO. Additionally, to enhance competitiveness in food, it will be divided into fresh food and F&B (food and beverage).

To strengthen merchandise expertise, the headquarters merchandise division, which was organized at the team level, was promoted to a division-level organization, and product categories were further subdivided by specialized fields. The overseas luxury goods division was expanded from one to three divisions, and the men's sports division was subdivided into men's fashion, sports, and children’s three divisions to increase product competitiveness.

Each division head will be appointed with internal and external experts possessing specialization in a bold manner. An open recruitment will be conducted for internal personnel, and even deputy general managers and general managers will be promoted to division heads (executive level) if they have expertise. The plan to advance female talent is also a notable point. CEO Jung stated, "We will double the number of female executives and store managers compared to the current level," aiming to respond swiftly to customer demands by placing female employees at the forefront, reflecting the distribution industry's characteristic where female customers play a significant role in purchasing decisions.

This renewal plan of Lotte Department Store is evaluated to reflect a sense of crisis regarding the recent management situation. A Lotte official explained, "This organizational restructuring represents CEO Jung’s determination to pursue a major change."

This content was produced with the assistance of AI translation services.