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| A Lotte Homeshopping employee introduces Korean firms' products to Indonesian buyers at an exhibition held in Jakarta, in this 2017 file photo. Courtesy of Lotte Homeshopping |
By Kim Jae-heun
The spread of the Delta variant of COVID-19 is concerning local retailers, as there are high possibilities of seeing a downgrade to their credit ratings, which could eventually affect their planned loan financing.
Major South Korean retailers such as E-mart and Lotte Mart have already halted their overseas business expansion plans and shifted priority toward strengthening online-centric businesses at home.
"Due to the continued spread of the Delta variant of COVID-19, performance of department stores and duty free businesses decreased significantly while online markets continue to grow at a fast rate," a Korea Investors Service (KIS) official said, Tuesday.
"We are seeing an increasing rate of vaccination here. But the Delta variant of COVID-19 is spreading. The KIS will have to review the financial situation in a number of business sectors before making any credit-oriented decision."
The local credit ratings agency has remained negative toward the overall outlook for the retail sector. Fiercer competition for the leadership of the domestic online retail sector has been cited as the core factor in terms of maintaining a less-than-rosy outlook.
The KIS said its credit-related decisions will be subject to seeing any financial improvements in retail operations.
