Lotte Mart selling some stores but may quit China entirely
SEOUL: South Korea’s Lotte Group is to sell some of its Chinese stores in the face of crippling measures imposed by Beijing over a United States missile defence system, it said yesterday — and could dispose of them all.
Lotte provided a golf course for the THAAD missile-interception system installed by South Korea and the US to defend against the North’s missile threats.
China strongly opposes the system as a threat to its own security, and has hit the retail giant, South Korea’s fifth-biggest conglomerate, with unofficial sanctions.
About 80 per cent of the 112 Lotte Mart stores in China have been closed for more than six months as authorities tightened safety and sanitary inspections and consumers boycotted them, costing Lotte hundreds of millions of dollars.
“We have decided to start selling stores in China, where we’ve been unable to operate normally for a long while,” said a Lotte Group spokesman. “But it has not yet been decided whether we will sell them all or some of them.”
Lotte Mart estimates it could lose one trillion won (RM3.7 billion) this year if the trend continues. Lotte, which had invested more than 10 trillion won in its Chinese operations since 1994, had named US investment bank Goldman Sachs as the lead manager to sell the China stores, said the spokesman.
The group has also been dogged by a bitter family feud, with the founder’s two sons engaging in public mudslinging over the succession.