Suspensions unlikely to be lifted for Lotte Marts

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Suspensions unlikely to be lifted for Lotte Marts

Lotte Mart’s suspended branches in China are likely to stay closed for more than one month - the penalty period for alleged fire regulation violations.

The stores are likely to remain closed until the end of this month.

Over 50 of its branches received one-month suspension orders in early March, which means that technically, there was a possibility of them reopening this week.

However, Lotte confirmed Sunday that it has not received permission to reopen any of its stores - even for 15 branches for which the suspension expired between Friday and Sunday.

One branch in Dandong received an official notice from the Chinese government to prolong its halt on operations to April 27, as fire officials pointed out new problems in the facility after three inspections.

Some fire officials are told to avoid any talks with Lotte Mart branches, or not conduct follow-up inspections, which are necessary for the stores to get approval to reopen.

The measure against the Korean retailer is part of the Chinese government’s retaliation against the deployment of the U.S. antimissile system also known as Thaad.

Lotte became a major target because it had agreed with the Korean government late February to swap its land in Seongju, North Gyeongsang, as the site for which the battery will be placed.

Industry insiders say that unless Beijing suddenly sees a change, most of Lotte Mart’s branches temporarily closed in China will have their suspension periods extended to two months.

A total of 87 Lotte Marts in China have temporarily stopped operations: 75 forcefully closed for fire regulations and 12 that did so voluntarily. This accounts for 88 percent of all 99 Lotte Mart stores in China.

If business continues to be halted for two full months, the loss may amount to 200 billion won ($179 million), according to company estimates.

Despite the drawbacks, an insider at Lotte Mart said that the company plans to continue following the official procedures for re-approval in China.


BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]

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