The prolonged slowdown in domestic demand against higher labor cost has accelerated streamlining in Korean retailers as top retailer Lotte after E-mart, began to dispose of money-losing outlets.

According to industry sources on Tuesday, Lotte Shopping has been contacting several candidates to sell Lotte Department Store annexed to Anyang train station, 20 kilometers off Seoul.

It is said to be in the final stage to close a deal with shopping mall operator Enter Six Co. to either sell or transfer its lease rights on the department store.

Until last year, downsizing has been rare among retail majors as they competed through economies of scale.

E-mart, the big-box store chain of Shinsegae, also has been scaling down to focus on efficiency.

Lotte Department Store Anyang, which is composed of nine floors above ground and one below, is directly connected to the Anyang train station and also within a short walking distance from an intercity bus terminal.

The branch had enjoyed robust sales as the only major shopping mall in the area since it opened in 2002 but its sales have nosedived after Lotte Department Store’s Pyeongchon branch began operation in March 2012.

The two department stores, both run by Lotte, are only 2.8 kilometers apart.

The retailer still has nearly half of its 30-year lease term left on the Lotte Department Store Anyang building. Following the closure of the Anyang outlet, Lotte Shopping will continue to shut down poor-performing stores

By Lee Yoo-jin and Cho Jeehyun

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