Lotte shut its Lotteria chains in Indonesia and Vietnam after years of losses

Lotte Group's restaurant unit Lotte GRS was withdrawing its food business from Southeast Asia. Lotteria Indonesia, which ran more than 20 stores, had been shutting down since 2020 after net losses reached 7 billion won in 2020 — it had raised 12.3 billion won by issuing new shares just to pay off debt, and its local office was in liquidation. In Vietnam, every Lotteria franchise had stopped operations, with headquarters reviewing closing the business within the year.

Lotteria Vietnam never turned a profit for Lotte GRS: its book value fell from 26.8 billion won in early 2020 to 15.6 billion won after 11.2 billion won in valuation losses — a net loss topping 10 billion won in a single year. The retreat also swallowed the unit Lotte had built to feed its ambition: the Vietnamese food-material supplier established in early 2020 was being wound down, even as Lotte GRS had drawn attention in March 2021 for pressing ahead with a 15.5 billion won investment in a Vietnamese raw-material corporation while most industries were cutting overseas exposure.

Vietnam mattered: Lotte Group had done business there since 1990, and the plan was to use it as a regional base for Southeast Asia, with Lotte Food investing in another Vietnamese corporation the previous July. Lotte GRS and Lotte Holdings attributed the shutdowns to the COVID-19 pandemic, which also delayed that expansion. Lotte Holdings had taken control of the overseas restaurant business when it was established in 2017; by the end of 2020 Lotte GRS's only overseas Lotteria affiliates were Indonesia and Vietnam.

Lotteria Indonesia, with more than 20 stores, lost 7 billion won in 2020 and had to issue 12.3 billion won of new shares just to repay debt before entering liquidation.

Lotteria Vietnam's franchises all stopped; its net loss topped 10 billion won in one year and valuation write-downs cut its book value by 11.2 billion won.

Lotte kept investing into the decline — a 15.5 billion won Vietnamese raw-material corporation announced in March 2021 — right before ordering the retreat.

Management attributed the closures to the COVID-19 pandemic, which also stalled the plan to expand from Vietnam into neighboring countries.

Three decades in a market buys no immunity: Lotte Group had been in Vietnam since 1990, and its restaurant bet still folded after a single loss-making year.

As of April 2021, Lotteria Indonesia's local office was in liquidation, Lotteria Vietnam's stores had all stopped, and headquarters was reviewing closing the Vietnamese business within the year alongside the 2020-built supply unit. Lotte Holdings, which took over the overseas restaurant business in 2017, was left with no operating Lotteria affiliates in Southeast Asia.