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The famous South Korean hamburger chain Lotteria of Lotte Group may shut down its business in Vietnam, after its closure in Indonesia, the Korea Times news website reported.
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A day latter, Lotteria Vietnam has confirmed that, the mentioned information is inaccurate.
According to the Korea Times, Lotte Group’s restaurant business unit, Lotte GRS, has been shutting down its Lotteria hamburger chain in Indonesia since last year. Also in the process of closing down is Lotte Group’s food material supplier in Vietnam, which was established in early 2020 to expand Lotte GRS’ business in neighboring Southeast Asian countries.
According to Lotte GRS and Lotte Holdings, Lotteria hamburger chains overseas are being shut down due to the COVID-19 pandemic. Lotte GRS’ overseas office in Indonesia is currently undergoing liquidation. Lotteria franchises in Vietnam have all stopped operations and its headquarters in Seoul is reviewing the possibility of closing down the business within this year.
As of the end of last year, Lotte GRS was operating two overseas affiliates of Lotteria, in Indonesia and Vietnam. After Lotte Holdings was established in 2017, it took control of the overseas restaurant business.
Lotteria Indonesia, which operates more than 20 stores there, is in the process of closing down after net losses reached 7 billion won in 2020. In the same period, it increased capital by issuing new stocks to raise 12.3 billion won to pay off its debts.
Lotteria Vietnam did not make any profit for Lotte GRS last year. Lotteria Vietnam’s book value stood at 26.8 billion won as of early last year, but declined to 15.6 billion won after recognizing 11.2 billion won in valuation losses. Its net loss surpassed 10 billion won in one year.
Lotte GRS drew attention in March of this year when it pushed ahead with the establishment of a raw material corporation in Vietnam by investing 15.5 billion won. This showed Lotte’s strong commitment to the Southeast Asian market. Most industries have been trying to reduce their presence in overseas markets.
Vietnam is one of the most important markets for Lotte Group since the conglomerate began doing business there in 1990.
Lotte GRS planned to expand its business to neighboring countries using Vietnam as a regional base by building a raw material company. Last July, Lotte Food, an affiliate of Lotte GRS, also invested in a new Vietnamese corporation. But the COVID-19 pandemic has delayed further progress.
“Lotteria Vietnam and others have met the requirements for closure starting this year,” the Korea Times news website citing the information from Lotte GRS official.
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Source: Vietnam Insider