South Korean retail group Lotte Shopping has set up a joint venture company with the Inditex Group to distribute and manage the Zara fashion brand in Korea.

The joint venture company will be called Zara Retail Korea, with the first Zara store in the country expected to open in 2008.

Lotte said that the paid-in capital for the venture was KRW650m (US$0.7m), with KRW130m from Lotte Shopping and KRW520m from Inditex.

just-style reported yesterday (17 October) that the Spanish group was planning its first store in the Ukraine during the first quarter of next year, as it forges ahead with international expansion.

Inditex currently operates in 68 countries through a network of 1,082 Zara stores and 3,429 stores through its other fashion units, while European rival H&M has 1,400 stores spread across 28 countries.

H&M told just-style that although it is looking for markets with a large population, the chain has no concrete plans for the Ukraine.

A spokesperson for H&M said: "This spring we have opened our first stores in China, Greece, Qatar and Slovakia.

"There is no goal in itself to open new stores in as many new markets as possible, since we want to grow in a controlled way. But of course Ukraine is a very interesting market. Time will show if, and if so, when, we will establish on the market in Ukraine."