Eighty out of 99 Lotte Mart grocery stores operating in China are out of business in the wake of Beijing’s outright discriminatory actions on South Korea’s Lotte Group after the conglomerate yielded its golf course as the site to install a powerful U.S. missile system, and Lotte estimates losses would reach 75 billion won ($66 million) if they stay closed for a month.
A senior official from the group said 63 stores have been forced to close down after fire safety inspection. Another 17 shuttered over safety concerns because of violent protests.
With 80 percent of Lotte Mart stores shut down, the retail conglomerate would seriously have to consider the future of its operation in China. Its losses would amount to 75 billion won a month because it must pay its employees during the business suspension period.
There have been no signs of relenting in the bombardment on Lotte. Construction of a theme park in Shenyang came to a stop, and a joint-venture confectionary factory set up by Lotte Confectionary Co. and America’s Hershey Chocolate & Confectionery Corp. also was ordered to halt.
The Korea’s fifth largest conglomerate ventured into China in 1994 and invested a total of 10 trillion won in the country despite incurring a deficit of near 200 billion won a year.
Lotte-bashing also brings about backlash to the Chinese economy. Lotte Group hires over 20,000 Chinese as each Lotte Mart store has a payroll of 150. Over 50,000 jobs would be lost from China if Lotte pulls out.
By Son Il-seon and Kim Yoo-tae
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]