Lotte Shopping to withdraw its last department store from China
Lotte Shopping is withdrawing its department store business from China, closing its only Lotte Department Store left in the country after failing to recover from the Terminal High Altitude Area Defense (Thaad) row.
Thaad is a U.S.-led antimissile system deployed in Korea in 2017. China levied economic sanctions on Korea following its deployment, calling the system an American scheme to spy on China.
The Chengdu branch is the only Lotte Department Store branch left in China. The company operated five branches in 2016, but has been closing them one by one after being hit hard by the Thaad fallout.
The decision to sell the branch was made at a board of directors meeting in July. Lotte Shopping said a buyer or a sales price hasn’t been decided.
Although time has passed since Thaad, the Chengdu branch hasn’t been doing well. The branch reported sales of 5 billion won ($3.8 million) in the second quarter, down 35.8 percent on year.
Lotte Shopping also operates Lotte Mart, a discount store, but closed all Chinese branches in 2018. Existing Lotte Mart branches were sold to Chinese retailers including Wumei and Liqun.
Once the company sells its department store branch, Lotte Shopping will only operate Lotte China Management in China. The company is 70 percent owned by Lotte Shopping, 15 percent by Lotte Corporation and 15 percent by Lotte Chemical. The subsidiary doesn’t operate stores or services but serves as a control tower to support Lotte’s Chinese businesses.
Stepping out of China, Lotte Shopping is planning on focusing on Southeast Asian countries. It operates two Lotte Department Stores in Vietnam as of the second quarter and one in Indonesia. It has 49 Lotte Marts in Indonesia and 14 in Vietnam.
BY LEE TAE-HEE [email@example.com]