Wal-Mart has decided to leave the competitive South Korean market in order to focus on international expansion in other areas, a Wal-Mart spokesman told just-food today (22 May).
The world’s largest retailer has agreed the sale of its 16 Wal-Mart Korea stores to the Shinsegae Co for US$882m. The unit’s sales totalled $787m last year.
“We want to focus our activities in areas where we can have maximum impact and potential for growth,” Bill Wertz of Wal-Mart’s international department told just-food.
“We came to the conclusion that because of the competitive market in Korea and the cost of doing business there we would have better potential for growth by turning our attention elsewhere,” he continued.
Wal-Mart said that its performance in South Korea had been uninspired, with its Korean unit ranked fifth of the five major discounters.
Wertz said that Wal-Mart would no-longer have a retail presence in the country, but would maintain its procurement office in South Korea.
The global retail giant’s decision to exit the market mirrors Carrefour’s departure from South Korea last month when the world’s second largest retailer sold its E.Land stores.
Shinsegae is Korea’s largest discount retail chain and operates the country’s third-largest department store. The company said that it would operate Wal-Mart Korea as a separate subsidiary that would be renamed E-Mart.