Wal-Mart is to take full control of struggling Japanese unit Seiyu, the US retail giant said this morning (22 October).
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Wal-Mart is to buy the remaining shares in the business in a deal worth US$862m.
“Today’s announcement is a reaffirmation of our commitment to Japan, the second largest economy in the world,” said Mike Duke, vice chairman of Wal-Mart Stores. “The Japanese retail market is of major strategic importance to Wal-Mart, and our goal is to achieve long-term success and growth in Japan.”
Wal-Mart became the majority owner of Seiyu at the end of 2005 but the Japanese convenience retailer has had a testing few months. In August, Seiyu warned that it expects to post yet another annual loss in 2007.
Seiyu, which runs 400 stores throughout Japan, forecast it would book a net loss of JPY5.9bn (US$49.9m) for the year, after it recorded a net loss of JPY6.9bn for the first six months of 2007.
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By GlobalDataThe company pointed to a slowdown in sales of seasonal merchandise such as apparel and consumer durables, as well as sluggish growth of tenant sales. Both factors led to sales dipping 1.4% to JPY461.6m during the first half.
