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Thai's CP may takeover E-Mart's remaining stores in China
Leading South Korean discounter, E-Mart, is in talks with Thailand's Charoen Pokphand Group to sale its five remaining stores in China.
In May, E-Mart announced that it was to shut operations in China by end of 2017. E-Mart China has struggled for profitability over the last few years, gradually scaling down its operations since 2011. Despite consolidation, the retailer still reported losses, most recently a net loss of KRW 21.6bn last year. E-Mart had ambitious growth plans for 1000 stores when they first opened in China, but this has failed to materialise, with the peak reaching 27 stores in 2010.
E-Mart's declining sales in China have been compounded by increasingly difficult relations between Seoul and Beijing over the deployment of the THAAD US missile-defence system in South Korea. Lotte, E-Mart's fellow-South Korean competitor, has also seen its sales plummet in China, with some outlets still temporarily closed after nearly four months.
The sale of E-Mart's remaining stores in China will help the company reduce losses in the market. August sales did rise 3.5 per cent to 1.2 trillion won from a year ago, but this is an indication of the volatile trading conditions in the current market, particularly impacting large-format stores. Negotiation for a deal is reportedly underway. Charoen Pokphand Group is one of the largest conglomerates in the world and currently operates discount chain CP Lotus in China.
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