April 26, 2018 12:47
Lotte Mart plans to sell 22 superstores in China to Chinese retailer Wumei for 1.5 billion yuan.
The Korean conglomerate suffered huge losses from China's unofficial boycott of Korean products and services last year. Beijing singled out Lotte in particular because it handed over a golf course for the stationing of a Terminal High-Altitude Area Defense battery from the U.S. here.
Wumei is a major retailer that was established in 1994 and operates around 400 superstores and convenience stores in and around Beijing. Lotte initially considered selling all its 112 stores in China, but opted instead to sell them piecemeal.
Lotte plans to pull out of China's retail market and focus on Southeast Asia.
Lotte began operations in China in 2007 and expanded quickly. But after it handed over the golf course, Chinese authorities "discovered" various health and safety violations and ordered 87 of its stores to close.
Sales in China plunged from W1.14 trillion in 2016 to W263 billion last year (US$1=W1,081).
The conglomerate was also saddled with W100 billion a month in workers' wages and other costs. Accrued losses last year totaled more than W1 trillion. Lotte injected W660 billion in emergency funding, but that ran out quickly as the boycott dragged on.
Cumulative losses surpass W2 trillion if lost revenues from declining Chinese business at its duty-free stores are included. Lotte's duty-free operating profit fell from W330 billion in 2016 to W2.5 billion last year.
- Copyright © Chosunilbo & Chosun.com