Lotte Mart sell­ing some stores but may quit China en­tirely

New Straits Times - - Business / World -

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.

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