E-Mart Inc., a discount store unit of South Korea’s Shinsegae Group that has begun streamlining at home after uninterrupted expansion during its 24 years in business, will entirely pull out of China by the end of the year.

Korea’s largest grocery chain on Monday said it decided to shutter all remaining six shops running in China, judging it no longer can sustain business in China because of poor profitability and outlook.

It is the first complete pullout from China by a Korean enterprise since China launched informal retaliations for Seoul’s decision to install U.S antimissile shield called the Terminal High Altitude Area Defense (THAAD) battery in Korea.

The management concluded the company was better to withdraw from China as soon as possible to minimize losses even if it has to pay penalties for closing down the stores before lease contracts expire. The source added that the retailer is also willing to sell the stores if there are buyers.

Poor business is the major reason. In 2011 alone, E-Mart recorded more than 100 billion won ($88 million) in loss from its Chinese operation. Its cumulative loss over the last four years reached 150 billion won due to expensive rent and sluggish demand.

When E-Mart opened its first store in Shanghai in February 1997, Shinsegae group announced it would expand to 1,000 stores in China. By 2010, the number reached 27.

In the following year, the company announced a management decision to close 12 outlets and has been phasing out since then.

By Son Il-seon and Choi Seung-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]