Lotte Mart is expected to sell 21 large supermarket and supermarket stores in Beijing to local distributor Umat. Lotte Mart is also accelerating the withdrawal of Chinese businesses, including negotiations to sell local stores such as Shanghai, Chongqing and Shenyang.

Lotte Shopping, on April 26, decided to hold an extraordinary board meeting and sell the Beijing-based company in Beijing to local distributor Umat Group. The sale target is 10 local marts in Beijing, 11 supermarkets, and the sale price is about KRW 248.5 billion. An official of Lotte Shopping said, "We will maintain a 5% stake in the North Korean corporation after the sale to maintain a strategic partnership and smooth acquisition of the two companies."

Lotte Shopping is in discussions with local distribution companies to sell Hwandong, Hwangjong, and Northeast. Hwangdong corporation in Shanghai is negotiating with prospective buyers and will sign a stock trading agreement (SPA) as soon as possible. According to industry sources, Lotte Shopping is reportedly in talks to sell 74 large-scale marts affiliated with China Rising Group. In the case of Huaxia Corporation and Northeast Corp, negotiations are underway with local retailers. Lotte Shopping also decided to proceed with a capital increase of 681.9 billion won in Hanwha to facilitate smooth negotiations and repay short-term borrowings.

As a result, Lotte Mart will take steps to clean up its local businesses after 11 years in China. In 2007, Lotte Mart entered the Chinese market by acquiring eight Dutch-based distribution chains. However, in February last year, Lotte Group decided to provide the government with Sungju Golf Club as a SaD site, and 87 out of 99 stores were shut down.

Last year, Lotte Mart`s sales in China (263 billion won) decreased 76.9% from the previous year and the operating loss (268 billion won) doubled. If we calculate sales loss and employee wage, it is estimated that cumulative loss in this period exceeds 1 trillion won.

Since then, Lotte Mart has selected Goldman Sachs as its holding company last year to sell Chinese stores. As the companies saw the Chinese authorities, the pace of the sale was slow. Lotte has accelerated its work by restructuring its strategy by split-sale method. Among them, a member of the Political Bureau of China`s Foreign Affairs Department at the end of last month said, "We will normalize group tourism in a short period of time, and Lotte Mart will be able to smooth the sale process."

Lotte Mart, who has enjoyed a high ranking in the Chinese market, plans to strengthen its efforts in the Southeast Asian market this year. In Indonesia, four wholesale stores and five retail outlets are opened to expand new store openings, and a small store in Vietnam is mainly planned.

By Park Min Yeong ironlung@


[ copyright ⓒ The Digitaltimes ]