E-Mart plans to sell several stores
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South Korean big-box retailer E-mart will sell 13 store buildings and land to improve its financial situation.
The firm will sell the properties to Mastern Investment Management for KRW952.48 billion (US$802.65 million) in the face of plummeting sales and intensifying competition from e-commerce. It will continue to operate its businesses on the properties under a lease arrangement.
The properties constitute 5.7 percent of the Shinsegae-owned firm’s total assets.
E-mart will use the funding to pay debt and diversify its operations into e-commerce.
“As the current retail market is dominated by e-commerce platforms, retailers have no choice but to continue to reduce their offline business,” said Hyundai Motor Securities analyst Park Jong-ryul. “With the fresh funds, they focus on venturing into the online market.”
Questions & Answers
Q.Why is E-Mart selling these properties?
Why is E-Mart selling these properties?
E-Mart is selling the properties to improve its financial situation. The company is facing plummeting sales and intense competition from e-commerce, which has impacted its traditional business model.
Q.What is E-Mart's plan for the funds raised from the sale?
What is E-Mart's plan for the funds raised from the sale?
E-Mart plans to use the funds to pay down existing debt. Also, the company intends to diversify its operations by investing in and expanding its e-commerce capabilities.
Q.Will E-Mart stores still operate at these locations after the sale?
Will E-Mart stores still operate at these locations after the sale?
Yes, E-Mart will continue to operate its businesses at these specific locations. This arrangement is possible because the firm will lease back the properties from the new owner, Mastern Investment Management.
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