1.Lotte Sounds a Retreat in China

Lotte Sounds a Retreat in China    Friday - Sunday,September 15 - 17, 2017

---

Geopolitical tensions prompt South Korean group to consider the sale of retail operation.

 

Seoul — South Korea's Lotte Group is conceding defeat for its Lotte Mart business in China,with plans to sell stores there after heavy losses brought on by diplomatic tensions between Sesoul and Beijing.

 

The conglomerate said it has selected Goldman Sachs Group Inc. to manage a sale that would mark the lastest set back for South Korean companies hit by boycotts and bans in China, amid anger over the deployment of a  U.S.-made missile-defense system in South Korean.

 

The sale plan is still in its preliminary stages.A lotte spokeswoman said the company hasn't dediced on whether to sell its entire hypermart and supermarket business or individual stores in China.A spokesman at Goldman Sachs in Seoul declined to comment.

 

South Korea's government indentified last year a golf course owned by Lotte as a site for the missile-defense system.The disclosure put the country's fifth-largest conglomerate — whose interests include luxury hotels,chemicals,chewing gum and duty-free stores — in the center of the geopolitical dispute. The battery was installed in April.

 

Beijing opposes deployment of the missile-defense system shield in South Korea, citing its radar's ability to reach into Chinese territory.Seoul and Washington say the system, known as Terminal High-Altitude Area Defense, or Thaad, is needed to defend South Korea and the 28,500 U.S troops based there from North Korean leader Kim Jong Un's expanding weapons program.

 

Since March, Lotte has closed 87 of its 99 hypermart stores in China. The business suffered after Chinese officals began suspending operations at some Lotte stores in the country — citing violations of fire and safety codes — and halted constrction on new projects.

 

The company estimates it has lost 500 billion won($441.7 million) from the business suspensions.It has injected 700 billion won as emergency-operation funds to quell the situation.

 

Aside from its hypermart business, Lotte operates in China more than 20 affiliates, which run shopping malls, confectioneries and chemical plants.The Lotte Mart business is the largest, and the company's revenue in China, its largest overseas market.The Lotte spokeswoman said the company's other business will continue to operate as before.

 

In an interview in March, Lotte Group Chairman Shin Dong-bin said China was too important a market to give up."We definitely want to continue our business in China," said Mr. Shin.

 

Auto maker Hyundai Motor Co. is another South Korean company hard hit by tensions between Seoul and Beijing, suffring temporary production halts and poor sales.For it latest quarter, Hytundai reported a 29% drop in car sales in China, compared with a year earlier.