Japanese retailer Seiyu, an affiliate of US retail giant Wal-Mart, has said it now expects a net loss of ¥83bn (US$704m) for the 2002/03 financial year to February, compared with the ¥21bn loss it forecast in October.

The company said the revised forecast was due to extraordinary losses on a department store investment. Seiyu said it booked a one-time loss of ¥35.49bn from its investment in Seibu Department Stores.

Wal-Mart has a 33.4% stake in Seiyu. The Japanese retailer said it could not have gone ahead with restructuring plans without the financial backing of Wal-Mart.

“Wal-Mart is fully and actively supporting Seiyu in its efforts going forward to improve its operational and financial situation,” a Wal-Mart spokeswoman was quoted by Reuters as saying.

“As we have maintained throughout our involvement with Seiyu, changes will be gradual – not immediate or dramatic,” she said.