Ocado shares soar after partnership with South Korea’s Lotte Shopping
Ocado shares surged by more than a third on Tuesday morning after the retailer inked a partnership deal with South Korea’s Lotte Shopping.
The London-listed tech firm said it had agreed plans for the development of a national fulfilment network, pushing shares up as much as 36 per cent by midday.
Lotte Group is one of South Korea’s largest business conglomerates and cashes in a total revenue worth £45bn annually, including from its department and e-commerce operator arm Lotte Shopping.
Ocado and Lotte will launch a network of customer fulfilment centres, with six planned by 2028.
The first centre is scheduled to launch in 2025, while in-store fulfilment software will be rolled out in 2024.
The firm, which is a joint venture between Ocado and supermarket heavyweight Marks and Spencer, will see its Smart Platform and in-store fulfilment solution launched across Lotte stores.
“With this new partnership, our unique, proprietary technology will now power the online businesses of twelve major retailers across ten countries worldwide,” Tim Steiner, CEO of Ocado Group, said on Tuesday morning.
Lotte is to pay Ocado Solutions some fees upfront and during a development phase. It will then pay the British firm continuing fees associated with both sales and installed capacity across Lotte’s estate.
Matt Britzman, equity analyst at Hargreaves Lansdown said the deal was “welcome news” for the group, which had “been struggling to drum up tangible deals for the Solutions businesses.”
“Investors will be pleased to hear no additional capital raises are on the cards, with the capex spend having already been modelled into Ocado’s plans,” he added.