South Korean retail giant Lotte has sold a second discount store unit in China to a local retailer in a major step toward withdrawing from the world’s second-largest economy.
Lotte Shopping will sell its affiliate for Lotte Mart in Shanghai and nearby areas to Liqun Group for about 280 billion won (US$262 million), according to the company.
Out of the 74 Lotte Mart outlets in the region, only four are currently open, with the others either voluntarily or compulsorily shut down. Liqun is known to be interested in taking over some 50 outlets, with the remainder expected to be shuttered.
The Korean retailer’s move comes about two weeks after the company decided to sell its unit that operated 21 stores in Beijing to another local retailer, Wumei Holdings, for 248.5 billion won.
The deal with Liqun would leave Lotte with 14 discount stores in China. The Korean firm is in talks with a number of retailers to wrap up the sales of the remaining stores within the first half of this year.
In September, Lotte Mart announced that it would pull out of China over heavy losses in the wake of a diplomatic row between Seoul and Beijing. Lotte Group bore the brunt of Beijing’s economic retaliation after the company handed over its golf course in South Korea’s southeastern rural county of Seongju for the deployment of a US missile defense system.
Seoul and Washington said the anti-missile system is only meant to counter North Korea’s evolving nuclear and missile threats. But China has repeatedly pressed South Korea to withdraw the missile system out of concern that the deployment could hurt Beijing’s security interests.
- Original reporting by Yonhap, via Korea Bizwire.