SEOUL, Jun. 23 (Korea Bizwire) — As China’s ongoing package tours ban to South Korea continues to hit Lotte Duty Free hard, senior officials at the company are now in full damage control mode, with executive board members returning a tenth of their salary in a bid to overcome the critical situation.
Lotte Duty Free announced some 40 high-level officials, including team leaders, submitted a resolution which will see 10 percent of their salary returned as a protective measure against a drastic drop in Chinese visitors in recent months, in a meeting for management strategy held on Wednesday.
Other measures proposed to alleviate the pressure caused by China’s ban on tour packages during the meeting include cost reductions and a shift in marketing focus to South East Asia, which the company hopes will help fill the void left by the absence of Chinese tour groups – once a major source of profit for the duty-free giant.
In the past, Lotte Duty Free typically held a bi-annual management strategy meeting, but the recent crisis has forced the retailer to hold a special meeting every month until the current situation improves.
Lotte Duty Free has been a leader in the South Korean duty-free industry, but the Chinese retaliation caused over the deployment of a THAAD missile defense system has cost the retailer billions, with figures from last month indicating a 46 percent drop in the number of foreign shoppers at duty-free stores in South Korea.
Earlier this month, CEO Jang Seon-wook pleaded with his employees in a letter where he called the THAAD crisis ‘unprecedented’.
“Let’s look back on the rapid growth and experience of success in the 37 years since the company was founded, and see if we’ve become too conceited or unaware of financial crisis,” the CEO’s letter read.