Supermarket giant Wal-Mart Stores Inc will raise its stake in struggling Japanese affiliate Seiyu Ltd to over 50% this year to boost its presence in the Japanese market, according to a report in the Nihon Keizai business daily cited by Reuters.
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The world’s biggest retailer will buy new shares in loss-making Seiyu, Japan’s fourth-biggest retailer, to raise its stake from the current 42.4%, the paper said.
Wal-Mart waded into Japan’s notoriously competitive and fickle retail market in 2002 by taking 6% in Seiyu, and has gradually raised its stake in the Japanese retailer since.
It has an option to boost its stake in Seiyu to 50.1% by the end of 2005 and has been widely expected to exercise the option and to inject fresh capital into Seiyu to prevent it from falling into negative net worth.
But there was also speculation that Wal-Mart may weaken the tie with Seiyu after the Japanese retailer posted a net loss for three straight years.
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By GlobalDataOfficials of Wal-Mart and Seiyu were not immediately available for comment.
The paper said Seiyu will invest about 50bn yen (US$448m) from the injected capital on 200 of its 405 group stores in the five years through 2009 in an effort to win back customers from rivals including Aeon Co, Japan’s biggest retailer, and second-ranked Ito-Yokado Co.
