It was turned upside down at just 10 lines The identity of the rumors that shook Lotte Group.
At around 10 a.m. on July 29, a sheet of “Tirashi” shook Lotte. The document, titled “Lotte Group-Distribution BU Tirashi,” was leaked to the media and spread to the outside world around 1 p.m.
The destructive power of a single-page document, simply summed up in ten lines, was simply enormous. It contained the prospect of personnel management and reorganization of distribution BU, which oversees distribution affiliates such as Lotte Shopping and Lotte Home Shopping, as the contents clearly revealed the group’s concerns about the distribution sector, regardless of its authenticity.
First of all, the truth is that most of the tabloid stories are false. Lotte Group Chairman Shin Dong-bin was found to be false from the first prediction that the group’s executives will be appointed as of August 1. It is also said that Lotte E&C is planning to separate Lotte E&C into separate affiliates, which is a mistake of copying of Rodeng as Odeng. Lotte Shopping has reorganized the organization to integrate online-related personnel, who were operating in department stores and large marts, into Lotte On starting this month. The move is aimed at empowering Lotte On CEO Na Young-ho, who was recruited by eBay Korea this year. The main point of the reorganization is to develop independence directly under Kang Hee-tae, the head of distribution BU (vice chairman), not a spin-off, and start the e-commerce war in earnest. An official from Lotte Holdings said, “There should be due process for greeting, but nothing is in progress regarding this.” “All contents of the tabloid are unrealizable.”
Although it turned out to be false, the aftershocks of the city of Tirashi have not subsided. The question about “who wrote it” is growing. Lotte Group is reportedly putting weight on internal responsibility. Lotte management’s judgment is that it is not the usual level of food prepared by securities and political circles. The fact that the contents of the rumors were reported to Chairman Shin is proof that the group’s management is taking the situation quite seriously. Shin was reportedly told to take strong action against groundless rumors after receiving a report on the rumors. Some say that Chairman Shin has called for a “footdresser.” Although the intensity of the remarks varies slightly depending on the sender, the key point is that Chairman Shin and the group’s management believe that the tabloid was produced internally.
Just looking at the distribution process of Tirashi, it is highly likely to be internal production. An official of Lotte Group said, “Tirashi was distributed to Lotte Holdings and other affiliates’ employees by 11 a.m., a little over 10 a.m. and two to three hours after that, we suspect that journalists and others received it.” The fact that the author of the tabloid poem used a “disguised ignorance” strategy to be seen as outside work also raises the possibility of internal affairs. ‘(current) Group Planning Office-Lotte Shopping Audit is underway’ is a representative example is this. The group’s strategic planning office, which served as the brain of Lotte Group in the past, was changed to the management innovation room in August last year. In addition, the Management Innovation Office is an organization that designs the future of the group such as M&A, and audits are carried out in the Management Improvement Office. Critics point out that the author of the tabloid poem intentionally tried to hide that he was an insider by putting the wrong information.
Then why did the “someone” inside write and distribute this tabloid? First of all, it is possible to estimate that it is a “brain official” inspired by the “surprise greeting” that forced Hwang Gak-kyu, vice chairman of the group, to resign on August 13 last year. At that time, Shin moved Vice Chairman Hwang to chairman of the board of directors of the holding company, and appointed Lee Dong-woo, CEO of Hi-Mart, as the new president of the holding company. If the group’s strategic plan was repaired last year, it is highly likely that the sense of crisis within the distribution BU could have emerged in the form of a tabloid rumor that the distribution division could spark this year. In particular, the general opinion is that the temperature in the department store sector in Lotte Shopping is about mid-winter. Lotte Mart alone has already closed 20% of all stores, and the number of related employees has decreased significantly. The department store, which has served as Lotte Group’s “deficit” and the group’s cash cow, has been relatively free from the typhoon of restructuring.
Some say that it is a reflection of the atmosphere related to the personnel appointment of executives of the group at the end of this year. It is significant that Lee Wan-shin, CEO of Lotte Home Shopping, was mentioned at the end of the tabloid rumors. By the date (August 12), CEO Lee Wan-shin stated that he would be selected for the distribution BU. CEO Lee is the enemy of Lotte Shopping, which has all had experience in department stores by just one year apart from current Vice Chairman Kang Hee-tae. In this regard, some even say that Zhu Yu, who is about to face the Red Cliff War in the Three Kingdoms, intentionally leaked false information to kill Chae Mo, a key commander of the Cao Tzu Army.
The “Tirashi crisis” is proof that Lotte Group is in crisis. In other words, if the mind and body become weak, one of the organs in the intestines and body parts sends a signal, which is a precursor to the disease inside Lotte Group in advance. From this point of view, some predict that a tabloid will serve as an opportunity for Lotte to be a blessing in disguise. Dongtan Branch, a new concept department store prepared by Lotte Department Store, and Lotte Shopping, which is set to open its premium outlet Time Village in September, have become comfortable for a successful success. Lotte Home Shopping will be on its own. As a result, it is expected that the group’s secretive personnel-related struggles will also disappear. This is why some say that tabloid rumors can be interpreted as a kind of warning from Chairman Shin. Interest in regular personnel appointments of Lotte Group, which will be held in October or the end of this year, is increasing.
