(Bloomberg) -- Lotte Group’s retail unit is selling 22 of its stores in Beijing to China-based grocer and hypermarket rival Wumei Holdings Inc. for 256 billion won ($237 million), the Chosun Ilbo newspaper reported, without saying where it got the information.
Lotte Shopping Co. has taken a sales hit in China over the past year after the group provided land for South Korea’s deployment of the U.S. missile defense system known as Thaad. As geopolitical tensions around the system rose, most of the retailer’s outlets in China were forced to suspend operations over alleged fire-safety violations.
South Korea’s largest retail conglomerate with interests spanning hotels to amusement parks and supermarkets had hired Goldman Sachs Group Inc. to help sell stores in China after years of investing aggressively in the country. A sale to Wumei, which controls Wumart, one of China’s largest retail chains, would suggest Lotte has chosen to sell off its chain in pieces, rather than as a whole.
Lotte Group declined to comment.
Lotte Shopping shares gained about 13 percent over the past 30 days as of Wednesday as geopolitical tensions with China have eased.
Lotte agreed in February 2017 to provide land from its golf courses to the South Korean government to host the Thaad system. The move prompted China’s Communist Party-affiliated Global Times newspaper to write in an editorial that “Lotte Group’s development in the Chinese market should come to an end.”
China had also imposed restrictions on group travel to South Korea last year, causing Hotel Lotte Co., the duty-free operator, to report falling sales for the first time since 2003.
©2018 Bloomberg L.P.
With assistance from Dave McCombs