Lotte has decided to borrow another $300 million to support Lotte Mart in China, according to the company on Thursday, as the discount chain continues to struggle amid negative Chinese consumer sentiment toward Korea.

The funds will come through Lotte Shopping Holdings in Hong Kong, which owns the Lotte Mart China corporation. This the second loan made to Lotte Mart China, following an initial loan in March of a similar amount.


In March, China began intensifying retaliatory actions against Korea and Korean businesses in China for Korea‘s decision to install an American anti-missile system here.

Of the $300 million, approximately $200 million will be used to pay back Lotte Mart China’s short-term loans while the remaining amount will be used to support operations in China.

Lotte Mart currently operates just 12 stores in China, with 74 having been shuttered due to regulation violations and 14 voluntarily suspending operations. The 12 stores are open but “struggling,” according to an official with Lotte Mart.

The company has continuously denied rumors that it is planning to pull out of China, but with the retaliatory crisis continuing for six months, industry watchers speculate that it will be difficult for Lotte Mart to hold out without additional measures such as closing down stores.

Emart, a rival Korean retail chain owned by Shinsegae, announced it would be closing all its China operations in by the end of the year. 

By Won Ho-jung (hjwon@heraldcorp.com)