Lotte to sell su­per­mar­kets by year-end

China Daily (USA) - - FRONT PAGE - By WANG ZHUOQIONG wangzhuo­qiong@ chi­nadaily.com.cn

South Korean con­glom­er­ate Lotte Group said on Thurs­day that it ex­pects to sell its Lotte Mart stores in China by the end of this year.

The com­pany has re­ceived in­ter­est from sev­eral buy­ers for its China stores and was eval­u­at­ing the pro­pos­als, ac­cord­ing to a Reuters re­port.

“We are in de­tailed talks with some of those com­pa­nies,” Lim Byung-yun, an ex­ec­u­tive vice-pres­i­dent at Lotte Corp, the group’s newly launched hold­ing com­pany, said at a news con­fer­ence.

The size of the deal is ex­pected to be small at a cou­ple of hun­dred mil­lion dol­lars, a bank­ing source said, de­clin­ing to be iden­ti­fied as the talks were con­fi­den­tial. Gold­man Sachs has been picked to man­age the sale, ac­cord­ing to Reuters.

Ja­son Yu, gen­eral man­ager of Kan­tar World­panel China, a re­search firm, said the likely buy­ers would be from North or East China. “I do not know who they are, but some lo­cal play­ers are still look­ing for store ex­pan­sions in Bei­jing or Jiangsu and the stores are at good lo­ca­tions,” he said. Yu had ear­lier said that Lotte Mart has been fac­ing com­pe­ti­tion from Chi­nese re­tail­ers and e-com­merce gi­ants. Be­cause of its lim­ited pres­ence, it could not build economies of scale or cre­ate an ef­fi­cient sup­ply chain, he said.

Hyper­mar­kets, su­per­mar­kets, and con­ve­nience stores in China grew by 3.5 per­cent in the sec­ond quar­ter of the year, ac­cord­ing to Kan­tar’s lat­est re­port. Sun Art Group, Auchan and RT-Mart, which are among the coun­try’s top 10 re­tail­ers, saw their mar­ket share grow or sta­bi­lize in the sec­ond quar­ter com­pared to the pre­vi­ous year, as they set up more stores to ex­pand their foot­print and pur­sued mul­ti­chan­nel strate­gies to cope with chang­ing con­sumer de­mand.

Among in­ter­na­tional re­tail­ers, Car­refour saw its mar­ket share re­cover on a quar­terly ba­sis as it opened 30 small for­mat neigh­bor­hood stores un­der the name “Easy Car­refour” to ap­peal to younger shop­pers who want con­ve­nience and a rel­e­vant mix of mer­chan­dise.

Lo­cal re­tail­ers con­tin­ued to out­pace their global coun­ter­parts with Wu-Mart’s mar­ket share ris­ing from 1.7 per­cent to 2.0 per­cent year-on-year.

num­ber of small for­mat neigh­bor­hood stores that Car­refour has opened

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