A mother of two working at the Cheongnyangni branch of the Lotte Department Store in Seoul jumped to her death from its rooftop, causing a public outcry about the treatment of employees by major department stores.
NoCut News reports that X, aged 47, managed a womenswear boutique at the department store and faced intense pressure from the upper management to increase sales. When she failed to meet the quota established by the department head overseeing her floor, she received hourly messages exhorting her to improve her performance and threatening her with the prospect of a dressing down. When sales continued to lag, X was told to buy merchandise with her own credit card.
Boutiques such as the one managed by X belong to brands who need the department stores for access to retail customers. They experience routine pressure from store executives to increase sales as a predetermined percentage is paid to the department store from which they lease retail space.
X’s suicide became public following a Facebook message posted by her daughter, who denounced media reports attributing the death to personal issues and asked that the incident be used to highlight the cavalier treatment of employees by major conglomerates dominating the Korean retail sector.
The practice of making employees buy merchandise at department stores is shared by the three major chains of Lotte, Hyundai, and Shinsegae, the last being a Samsung subsidiary. Gamaechul, or ‘fake sales’ paid for by employees, would be counted toward company profit, while employees would remain responsible for the debt they accrued.
The three chains apparently share a blacklist of employees who are fired for failing to meet the sales quotas. Once fired from one chain, they would be unable to find employment at the other two.
The revelation has prompted an outcry and a possible boycott of Lotte, a chaebol that exercises significant influence over South Korean economy and has stakes in a diverse array of business ranging from retail to banking, construction, and heavy chemicals. Meanwhile, it has been reported that the Lotte management, in a poor attempt at damage control, has ordered all employees to refrain from talking to the media about the incident or face termination.
At a time President Park Geun-hye’s promise to execute “economic democratization” of South Korea by curtailing the power of chaebol is under scrutiny, it remains to be seen if the death of one saleswoman will have an impact on the government’s reform of the country’s economy.
From NoCut News:
Collective Rage at Lotte Department Store: Silencing Rendered Useless
Abounding Testimonies about Death of Female Employee… Even Talk of ‘Blacklist among Three Companies’
‘If you talk to the media, you will never set foot in the department store business again.’
After it was revealed that the Lotte Department Store had issued threats to all employees not to talk to the media about the suicide of a female employee at a boutique inside its Cheongnyangni branch, a maelstrom of criticism is brewing.
Former and current employees working in department retail as well as their families are releasing furious testimonies and reports to media outlets as well as on cyberspace.
The gag order has been effectively rendered pointless, and many netizens are calling for a boycott of Lotte, putting the department store in a corner.
Testimonies by current and former employees confirm a well-known industry secret that large department stores routinely force employees to fill the sales quota by their using credit cards or those belonging to friends and family.
A, who claims to have worked at Lotte and Shinsegae, testified in an interview with CBS that ‘My family would ask me whether I was going to work to make money or to swipe my card.’ A added, ‘If there were insufficient sales, the department called the brand headquarters to change the manager, and that wasn’t the worst of it. I am sure I wasn’t the only one to think about suicide.’
B, manager at a clothing company, said ‘When I worked [at a department store], I probably accrued close to 200,000,000 KRW (approx. 200,000 USD) in debt to create fake sales during a five-year period. My salary was less than 20,000,000 KRW per year, but my credit card expenditure was around 40,000,000 KRW, making me a VIP in the eyes of the card company.’
Another former manager, C, said, ‘There was a department head on every floor, and every night after closing, the department heads returned half-dead from a meeting held by the branch chief, only to convey their stress to boutique managers in turn.’
D, who says his wife is a manager at a department store, said, ‘Every month the department store asks how much in sales she will make, and if she says 50,000,000 KRW, the floor head will insist that the number be increased to 60,000,000 KRW.’
So every month, there would have to be close to 10,000,000 KRW in fake sales at this one boutique alone, creating debt burden on employees and prompting drastic decisions.
E, who claims to have a friend working as a manager at a department store, said, ‘My friend was under a lot of pressure so I used my card to create fake sales several times. I understand there have been several suicides.’
It is not only the fake sales that pushes employees to the brink. The testimonials also indicate that it is normal for the department store to insult the personal dignity of boutique managers and force them to work overtime.
F who currently manages a boutique inside a department store said, ‘Some floor heads are known to be such masters at psychological torture that they make Lee Keun-ahn [a notorious torture expert during the military dictatorship] pale in comparison. I just don’t understand how people can value professional success so much that they can justify causing such misery to others.’
G, who claims to have quit a manager post a month ago said, ‘I was forced to make at least 5,000,000 KRW in sales everyday, regardless of whether it was a weekday or weekend. I couldn’t dream of going home before 10 pm.’
When department stores call high-paid celebrities to make an appearance, that expense was shouldered entirely by the boutiques.
A, the former boutique manager at Lotte and Sinsegae, said, ‘When a celebrity comes, it costs 10,000,000 KRW per hour to pay for the appearance, and the department made the brands pay for it. We even had to pay for the meals customers ate.’
The interviewees voice that Lotte is not the only department chain known for its callous treatment of employees. H, manager at a different department chain said, ‘The three major chains share a blacklist of employees who fail to fill quotas. Isn’t this a kind of collusion?
The major department store chains have remained silent as the rage of employees find greater expression, but there are also signs of fluster.
Lotte, the focus of the current controversy, has, however, issued a statement: ‘We feel that this suicide is most unfortunate and regrettable. We will wait until the police determines the motive behind the suicide to clarify our official position.’
Comments from Daum:
First of all, let’s boycott Lotte.
I may be a Busan native, and I already knew that Lotte was the worst of the worst, but it really is rotten to the core. I admit I have never spent money or bought anything there, but this really is goodbye.
They are garbage. I am going to boycott. And all its subsidiaries. And other major department stores.
It really is a corporation worthy of a boycott.
The whole world knows that Lotte is the worst of the lot.
You think it’s just department stores?? The same happens at big marts!!
They really are a bunch of scum. Just how long do you think you will live that you behave with such venom. It is because of these evil corporations that society is becoming more and more unlivable.
The worst kind of garbage no better than a dog’s dick, that is Lotte!! Let’s punish this Japanese company [Lotte was founded by a Japanese of Korean-descent] with the power of the Korean people!
Large retail companies… you buy the best locations at city centers with your money and practice usury with brands and employees under your control. Why don’t you ever think about the employees who kill themselves? Executives should be forced to work in retail for a change or there will be no improvement.
So celebrities can do some autographs and have pictures taken for three hours, all for which they get paid 30,000,000 KRW…
There is a reason Lotte is a Japanese corporation. He he.
That is how celebrities can ride luxury cars worth 300,000,000 KRW… Scumbags…
Pro-Japanese corporate trash
It hasn’t been a half year since the new president took office. Why don’t you do something?
Time for a boycott…