Walmart eyes selling Seiyu, exiting Japan
TOKYO (The Japan News/ANN) - U.S. retail giant Walmart Inc. is considering selling its Japanese subsidiary Seiyu GK, it has been learned.
With an eye to strengthening its digital retail business to counter rivals, such as major U.S. online retailer Amazon.com Inc., Walmart is apparently seeking a way to exit the Japanese market, which is expected to shrink in tandem with the declining population.
Seiyu, based in Tokyo, operates more than 300 large-scale retail outlets and supermarkets in Japan. Walmart has already begun approaching trading houses and other companies. Investment funds also could be potential suitors.
However, negotiations are likely to proceed with difficulty as costs, such as to handle unprofitable stores of financially struggling Seiyu, are expected to balloon.
In the Japanese retail industry, competition has intensified with convenience store and drugstore chains continuing to expand while online retailing businesses have grown. The supermarket sector has been struggling amid a budget-minded consumer trend, prompting operators such as Aeon Co. and Seven & i Holdings Co. to restructure their businesses.
Seiyu’s predecessor, Seibu Stores, was established in 1956 when Seibu Department Stores Ltd. launched a supermarket unit. Seiyu had expanded its chain, but its performance worsened after the bursting of the economic bubble. It formed a capital and business alliance with Walmart in 2002 and became the U.S. retailer’s wholly owned subsidiary in 2008.