South Korean conglomerate Lotte Group is finally giving into relentless retaliatory actions from Beijing authorities after it yielded a land lot to host a U.S. missile shield against increased nuclear and missile threat from North Korea, starting with its grocery chain stores across China that have mostly been piling up losses from forced business suspension.

According to Lotte Group and sources from investment bank and retail industries on Thursday, Lotte Mart has recently picked Goldman Sachs to advice on its pullout campaign.

The option to entirely withdraw from China is on the table, sources said.

Emart, grocery chain under another Korean retail conglomerate Shinsegae Group, also in May decided to pack out from China after 20 years in business

“After reviewing several options, the company has come to the conclusion that selling the stores would be the only solution,” an unnamed official at Lotte Mart said.

Lotte names were boosted by the news on expectations of eased uncertainties in the Seoul market overall weighed by the news of North Korea’s renewed missile provocations.

Shares of Lotte Shopping that reflects the Chinese operation of Lotte Mart gained 8.4 percent to close Friday at 238,500 won. Lotte Chilsung closed at 1,512,000 won, up 1.48 percent from the previous session.

The company is now tapping various candidates including Chinese retailers and other foreign companies to sell its assets there.

Lotte Group has become the main target for state-sponsored boycott and retaliatory actions after its golf site was selected as the location for the U.S. Terminal High Altitude Area Defense (THAAD) battery unit last year.

Lotte Mart has been forced to close 87 of its 112 outlets, and the remaining stores have been more or less out sitting nearly idled. To cover operational losses, Lotte Mart has injected 360 billion won ($317.9 million) emergency funds in its Chinese operations in March then additional 340 billion won lately. The Korean retailer has to pay salaries even when its business is closed under labor laws in China.

Lotte Mart fears the losses could snowball to 1 trillion won by the end of this year.

The retailer has waited out with hopes that bilateral ties will be normalized after liberal President Moon Jae-in took office as he had been negative towards deployment of the antimissile system in Korea.

The group had suffered big from the row over THAAD, which Beijing frantically opposes by referring it as a surveillance camera over its head. The country has not relented in its opposition even as Pyongyang continues to test-fire intercontinental ballistic missile placing the region as well as the United States across the Pacific within range target and recently most-powerful yet hydrogen nuclear bomb.

On November 29, the Chinese authority conducted a tax investigation into all Lotte units.

After the group decided to hand over its golf resort site to the Korean government for the THAAD deployment, the Chinese government suspended business of Lotte Mart outlets citing fire-safety issues and imposed fines on the retailer after conducting on-spot inspections on hygiene, telecommunications and advertisements.

Beijing’s National Development and Reform Commission recently confiscated and auctioned off 23 generators and four transformers from Lotte Mart outlets in Jiuxianqiao and Yangqiao in the capital city, citing their excessive use of energy by the two stores based on its inspection last year.

Lotte Group has been also grappling with a construction halt of its amusement park Lotte World in Shenyang since December last year. The conglomerate has planned to build an indoor theme park in Shenyang on a site of 160,000 square meters, which is part of its Shenyang Lotte Town Project that has been promoted since 2008. The group has already injected 3 trillion won in the project, but the construction of its iconic theme park has been halted after the Chinese authority stopped it, citing fire-safety issues.

By Sohn Il-seon and Lee Yoo-jin

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