Lotte Considers Selling China Malls Amid Anti-Korean Sentiment
Lotte Considers Selling China Malls Amid Anti-Korean Sentiment
(Bloomberg) -- Lotte Group, reeling from a wave of anti-Korean sentiment in China for more than a year, is considering selling some of its department stores in the country, a move that would accelerate the conglomerate’s withdrawal from the world’s second-largest economy.
The sale of some of Lotte Shopping Co.’s five malls is among options being reviewed in the country, a Lotte Group spokesman said, in response to an earlier Chosun Ilbo report. Lotte Confectionery Co., which has three factories in China, is also reviewing its business there, the representative said.
Despite some signs of thawing, Lotte’s ongoing struggles illustrates how South Korean companies continue to face hardships in China about a year and a half after Seoul angered Beijing by deploying a U.S. anti-missile system. Hyundai Motor Co. has also seen its sales fall in the country in the wake of the geopolitical dispute.
Sales at Lotte’s China department business fell 22 percent to 76 billion won ($68 million) in 2017, resulting in 70 billion won in operating losses.
Lotte, the Korean retail giant, has agreed to sell most of its supermarkets in China as losses kept piling up. Lotte has also suffered at home as the influx of Chinese consumers visiting its hotels and duty free shops dried up, according to the Lotte spokesman. The group also has theme-park projects and a chemicals business in the country.
Lotte has been at the center of what has been perceived as retaliation against Korean businesses because the group offered one of its golf courses to house the controversial missile-defense system in 2017.
Last week, South Korean Finance Minister Kim Dong-yeon asked Chinese counterpart Liu Kun for China’s cooperation to resolve Korean companies’ difficulties in China.
To contact the reporter on this story: Sohee Kim in Seoul at skim847@bloomberg.net
To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Jeff Sutherland
©2018 Bloomberg L.P.