Seiyu, the Japanese retailer in which Wal-Mart has a 37.7% stake, upset investors yesterday [Tuesday], unveiling worse-than-expected losses.

Net losses came in at ¥90.8bn (US$760m) for the year, well down from the ¥5.2bn profit it reported a year ago, and behind recent forecasts. The poor performance was attributed to a special loss of ¥102.6bn, attributed in part to a drop in the value of its share in the Seibu department store group.

On a brighter note, sales improved 2.8% to ¥1.397bn, although operating profit declined by 17.5% to ¥16.6bn.

Looking forward, the company was bullish, anticipating a net profit of ¥3bn on sales between March and December.

Seiyu has recently changed its financial year to end in December rather than February. The group also announced plans to set up an executive committee as preferred by US corporate governance norms, and to issue employees with stock options. These changes follow the appointment of five Wal-Mart executives to the board of Seiyu, and are yet to be approved by shareholders.