China: E-mart shuts 5 stores as profits wane
E-mart plans to cease operation of four branches in the Tianjin area at the end of December, the Shinsegae affiliate said in a press release. Another Tianjin store that had been suspended due to a fire will also be shut down, it said.
With the move, the discount retailer that once operated as many as 27 branches in the world's second-largest economy will be operating 10 stores in the country. It does not have any other overseas branches.
"We decided on the closure as profit worsened due to an unfavorable sales environment, such as weakening competitiveness, and high property costs," said Kim Seok-beom, who oversees the company's China business. Kim said the company will continue to "normalize" the remaining branches in China, hinting at additional closures. In 2011, the discount retailer sold off 11 stores to improve its "management efficiency."
E-mart has been winding down its business in the neighboring country after a prolonged period of disappointing financial figures. In the third quarter, five of the company's six China units logged a net loss, according to its quarterly report. The company operated 151 branches throughout South Korea as of the end of September.
While scaling back its China business, the company is set to tap into the Southeast Asian market by opening a store in Vietnam late next year. "If E-mart's first Vietnam store opening is successful, we will plan expansion into other ASEAN countries such as Laos, Myanmar, Cambodia and Indonesia," Shinsegae heir and vice chairman Chung Yong-jin told reporters earlier this week.
Source: koreaherald.com
