S Korea’s Lotte to sell China shops in face of boy­cott

Daily Sabah (Turkey) - - Business -

SOUTH Korea’s Lotte Group is to sell some of its Chi­nese stores in the face of crip­pling mea­sures im­posed by Bei­jing over a U.S. mis­sile de­fense sys­tem, it said Friday, and could dis­pose of them all. Lotte pro­vided a golf course to Seoul for the THAAD mis­sile-in­ter­cep­tion sys­tem in­stalled by South Korea and the U.S. 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 per­cent 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,” a Lotte Group spokes­woman said. But it has not yet been de­cided whether we will sell them all or some of them.” The group’s key sub­sidiary, Lotte Mart, in March had to in­ject 360 bil­lion won ($318 mil­lion) of emer­gency funds to keep the China stores afloat and re­cently de­cided to pour in an ad­di­tional 340 bil­lion won. Lotte Mart es­ti­mates that it could lose 1 tril­lion won this year if the trend con­tin­ues. Lotte, which has in­vested more than ten tril­lion won in its Chi­nese op­er­a­tions since 1994, has named U.S. in­vest­ment bank Gold­man Sachs as the lead man­ager to sell the China stores, the spokes­woman said. Sep­a­rately, the Yonhap news agency re­ported that South Korea’s big­gest su­per­mar­ket chain E-Mart, which has suf­fered years of op­er­at­ing losses in China, is wind­ing up its five re­main­ing shops in the coun­try. It has also been said that the chain is in talks to sell them to Thai con­glom­er­ate Charoen Pokp­hand Group, which runs other su­per­mar­ket chains in China.

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