Lotte China says it has sold one of its four Chinese subsidiaries to local retailer Wumei Holdings for US$230 million.
The sale marks the first major step in the Korean retailer’s withdrawal from Mainland China, where its operations bore the brunt of geopolitical tensions over South Korea hosting US missile defence systems.
Lotte China has signed a deal with Wumei selling 87.38 per cent of the unit which owns 21 stores in Beijing, comprising 10 Lotte Marts and 11 Lotte superstores.
Wumei is the parent of Wumart, which owns about 900 supermarkets and smaller store formats across China with annual sales of about $8 billion.
Negotiations are ongoing with other potential buyers of the remaining three units, which together operate another 88 Lotte Marts in China.
Lotte Mart’s withdrawal from China ends a 10 year foray into the market.
Yonhap news service reports that Lotte has lost about 1.2 trillion won (US$1.115 billion) in lost sales due to the controversy and its subsequent withdrawal, but Lotte has never confirmed this.