SEOUL - Lotte Group, which operates South Korea's second-largest retailer Lotte Shopping, said it was considering buying GS Retail's department store and discount store operations.

We are reviewing buying them [GS Retail's department stores and discount stores], but for now that is all, Lotte Group spokesman told Reuters on Thursday.

Late last year, GS Retail, retail arm of GS Group led by GS Holdings, hired Barclays Capital as lead manager for the sale of its discount store arm GS Mart and department store business GS Square, which operate 14 and three outlets, respectively.

Analysts estimated the deal to be worth between 1 trillion won ($891.6 million) and 1.4 trillion won.

Lotte is probably looking to boost its discount store business as its position in the discount retail segment is weak compared with rivals E-Mart and Home Plus, said Song Sun-jae, an analyst at Hana Daetoo Securities.

E-Mart, operated by Shinsegae Co Ltd, South Korea's top retailer by market value, and Home Plus, operated by Samsung Tesco Co Ltd, are No.1 and and No.2 in the discount retail store industry, respectively, in terms of store numbers.

Shinsegae and Home Plus both expressed interest in the GS Retail deal last year.

Since Lotte already has a strong position in the department store segment, adding three GS Square outlets to its portfolio would likely have limited benefits, Song said.

Shares in Lotte Shopping were down 3.91 percent at 307,000 won as of 0247 GMT, compared with the broader market's 0.96 percent gain. (Reporting by Jungyoun Park; Editing by Chris Lewis)