SEOUL, May 11 (Korea Bizwire) — South Korean retail giant Lotte said Friday it has decided to sell one of its discount store units in China to a local retailer in a major step toward withdrawing from the world’s second-largest economy.
Lotte Shopping Holding Hong Kong Co. will sell 100 percent of its stake in its Chinese unit that operates Lotte Mart in Shanghai and nearby areas to Liqun Group for 291.4 billion won (US$272.7 million), the Korean firm said in a regulatory filing.
Out of the 74 Lotte Mart outlets in the region, only four are currently open — the others have been either voluntarily or compulsorily shut down. Liqun is expected to buy 53 outlets, with the remainder likely to be shuttered.
The Korean retailer’s move comes about two weeks after the company announced its decision to sell its unit that operated 21 stores in Beijing to another local retailer, Wumei Holdings Inc., 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 U.S. 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.
Shares of Lotte Shopping closed up 1.7 percent to 239,500 won on the Seoul bourse, outperforming the broader KOSPI’s 0.55 percent gain. The sales announcement was released during trading hours.