E-Mart Inc., a discount store unit of South Korea’s retail conglomerate Shinsegae Group, has signed a deal to sell its stake in Costco Wholesale Korea and its leased store property to the local subsidiary of the U.S. retail giant.
Under the deal, E-Mart will sell its 3.3 percent stake in Costco Wholesale Korea and premises on which three Costco stores have operated in Seoul, Daegu and Daejeon. The parties agreed not to disclose the value of the deal.
E-Mart said the sale aims to capture cash for future growth and streamline operational efficiency in the face of increasing uncertainty in the retail business amid sluggish consumption.
The latest deal comes at a time when E-Mart is carrying out its store restructuring that was initiated early this year. It already divested land in the metro area in Korea and is on track to pull out of China by selling E-Mart stores to a foreign company by the end of this year.
The deal has also coincided with the company’s move of aggressively expanding its own wholesale warehouse store Traders, which sells items in bulk like Costo but doesn’t require a membership. E-Mart is expected to report solid earnings this year on strong growth of its new businesses such as Traders and e-commerce sales.
By Lee Yoo-jin
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