Lotte takes over GS's discount, department stores

(ATTN: RECASTS headline, lead; ADDS more info throughout)
SEOUL, Feb. 9 (Yonhap) -- Lotte Group, a South Korean conglomerate, on Tuesday
took over 14 discount stores and three department stores of GS Retail Co., GS
Group's retail arm, tightening its grip on the local distribution market.
Earlier in the day, Lotte signed the deal with GS Retail, which said the
agreement is estimated to fetch up to 1.34 trillion won (US$1.1 billion).
Under the deal, Lotte Group agreed with GS Retail to hire 2,600 employees at the
high-end and discount stores over four years, GS Retail said.
The acquisition will bring the total number of Lotte's discount and department
stores to 84 and 29, respectively, from 70 and 26.
Lotte Shopping Co., the country's second-largest retailer and a unit of the
group, operates two divisions -- Lotte Mart, the country's third-largest discount
store chain, and Lotte Department Store, the No.1 department store chain.
Tuesday's deal is expected to accelerate the group's push to become a retail
behemoth. Lotte Group, which has a total of 185 discount stores, including 101
overseas units, has drawn up a plan to increase the number of overseas discount
stores by 20.
"Through the acquisition, we plan to operate nearly 100 stores across the nation
this year, laying the foundation to better compete with rival companies," said
Nho Byung-yong, head of Lotte Mart.
The discount store chain is targeting 9.4 trillion won in sales this year,
including 900 billion won from the operations of GS Retail, Lotte said.
The biggest discount chain in South Korea is E-Mart, operated by top retailer
Shinsegae Co., followed by Home Plus, operated by Samsung Tesco Co.
Lotte Department Store is followed by Shinsegae Co. and Hyundai Department Store Co.
Lotte Group's acquisition of the GS Retail discount stores and department stores
follows its takeover last month of the Buy the Way convenience store chain from a
U.S. private equity fund for 274 billion won.
Lotte currently operates 3,231 convenience stores in the country after acquiring
1,231 Buy the Way stores, closing in on the 3,388 outlets of the GS25 convenience
store chain operated by GS Group.
ksnam@yna.co.kr
(END)