Lotteria Vietnam has said that it will continue its business expansion in Vietnam amid Korean media reports of its closedown over a net loss of nearly US$9 million.
The company, which is operated by Lotte GRS under South Korea’s Lotte Group, dismissed a media report that it would cease operations in Vietnam, a spokesperson told Tuoi Tre (Youth) newspaper on Saturday.
There is an inaccurate understanding of the Korean media report, the Lotteria Vietnam spokesperson added.
Lotteria Vietnam is proceeding with its normal business while an expansion is underway.
The firm is expected to invest in a new plant at Long Hau Industrial Park in Long An Province, just outside Ho Chi Minh City, and open ten Lotteria stores in 2021.
“We are working with our parent company in South Korea to clarify its new strategy,” the spokesperson told Tuoi Tre.
The spokesperson further explained that Lotteria Vietnam is still operating its franchise business and has reached almost 100 franchised restaurants.
Entering the Vietnamese market in 1998, Lotteria Vietnam is running over 260 outlets and is among the top fast-food chains in the Southeast Asian country.
The Korea Times reported on Sunday that Lotteria Vietnam is not closing down.
“It is true that Lotte GRS is leaving the Indonesian market but we are continuing with our franchise and food retail businesses in Vietnam," the newspaper quoted a Lotte GRS official as saying.
The paper seemed to correct its report on Friday that had cited “a Lotte GRS official” as saying “Lotteria Vietnam and others have met the requirements for closure starting this year."
Friday’s article said that Lotte GRS was in the process of closing down “Lotte Group's food material supplier in Vietnam, which was established in early 2020 to expand Lotte GRS' business in neighboring Southeast Asian countries.”
“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,” The Korea Times reported.
The report went on to elaborate that Lotteria Vietnam did not make any profit for Lotte GRS in 2020.
“Lotteria Vietnam's book value stood at 26.8 billion won [$24 million] as of early last year, but declined to 15.6 billion won [$14 million] after recognizing 11.2 billion [$10 million] won in valuation losses,” the article said.
“Its net loss surpassed 10 billion won [$8.9 million] in one year.”