Lotte reshuffles biz portfolio with Busan store sale to Shinsegae
Lotte Department Store's Centum City branch in Busan / Courtesy of Lotte Shopping
Lotte Shopping, a retail affiliate of Korea's Lotte Group, said Thursday it has agreed to sell a department store in the southeastern port city of Busan to rival Shinsegae Group as part of its business reorganization.
The move is part of the company's "select and focus" strategy, aimed at responding swiftly to rapidly changing retail market conditions through asset sales and business restructuring, the company said in a press release.
The deal to transfer Lotte Department Store's Centum City outlet in Busan, about 330 kilometers southeast of Seoul, to Shinsegae Centum City will be completed following a review by the Fair Trade Commission (FTC), the company said.
"We will increase investment in core department stores nationwide and strengthen our business competitiveness by developing new shopping malls," a company official said.
Lotte Shopping currently operates four department stores in Busan, including the Centum City outlet. The outlet will remain in operation until the FTC completes its review.
Globally, Lotte Shopping operates 61 department stores, including four in Vietnam and Indonesia, as well as 174 discount stores, including 62 in the two Southeast Asian countries.
Amid fierce competition in the retail sector and a prolonged downturn in the petrochemical industry driven by an oversupply from China, Lotte Group has sold non-core assets and restructured its business portfolio in recent years.
Separately, Shinsegae said Thursday it had submitted documents to the antitrust regulator seeking approval for the integration of the two department stores in Busan.
"Through the acquisition, we will develop Shinsegae Centum City into Shinsegae Town, a global landmark representing Korea by organically integrating shopping, culture, tourism and urban spaces," Shinsegae Chief Executive Officer (CEO) Park Joo-hyung said.
Shinsegae operates 13 department stores in Korea and has no overseas outlets.