Seibu Department Stores Ltd. will dismiss about 250 full-time employees at four outlets to be closed later this year in line with the firm's restructuring drive, company sources said Tuesday.

The step is highly unusual, as Japanese retailers undergoing restructuring usually transfer staff to different locations or encourage them to take early retirement.

Seibu, however, believes that slashing labor costs is necessary to improve its finances, the sources said.

The four stores to be shut down are in Kawasaki; Hakodate, Hokkaido; Sendai; and Toyohashi, Aichi Prefecture. They will begin closing in August.

The affected employees account for around 7 percent of Seibu's workforce of 3,400 as of the end of February.

The company will soon begin negotiations with its labor union, the sources said.

Seibu is in the process of receiving 230 billion yen in aid from its creditors under a creditor-led restructuring process that includes integrating operations with department store operator Sogo Inc. in June.

Sogo President Shigeaki Wada, who became the special adviser to Seibu on March 1, is overseeing the reconstruction measures.

Seiyu reports net loss

Seiyu Ltd. said Tuesday it posted a group net loss of 90.84 billion yen for the year ended in February due to restructuring costs and hefty losses on shareholdings.

In the previous year, the retailer, which is 37.8 percent owned by U.S. giant Wal-Mart Stores Inc., posted 5.2 billion yen in net profit.

The operator of 209 supermarkets said it expects a return to the black for the current year by introducing cost-effective store operations practiced by Wal-Mart.

Group operating profit for the 12-month period to February plunged 17.5 percent to 16.56 billion yen, while sales were up 2.8 percent to 1.14 trillion yen. The firm said that a drop in margins on clothes and household items dragged down profits.

At a news conference announcing the results, Seiyu President Masao Kiuchi explained how the chain will turn around its operations by borrowing from Mal-Mart's business philosophy, such as standardizing store operations.

Currently, there are no Wal-Mart stores in Japan.

He said the firm is trying to infuse the U.S. chain's corporate culture, noting that it will send more than 400 store workers nationwide to Wal-Mart's general shareholders' meeting in June.

However, Kiuchi admitted the shift in business style has not been all smooth sailing. Seiyu's sales dropped sharply in December after the chain reduced its special discount campaigns and shifted to Wal-Mart's "Everyday Low Price" policy.

Japanese shoppers, typically attracted by steep mark-downs touted via fliers, are apparently less impressed with the more permanent discount policies practiced by Wal-Mart.

"We will see (the complete transition to the low-price policy) in three to five years," Kiuchi said.

In a more tangible sign underscoring its integration with Wal-Mart, Seiyu also announced it will change its business calendar to that of the U.S. firm by beginning the year in January.

For the truncated 10-month year ending in December, the operator expects 3 billion yen in group net profit on revenues of 980 billion yen.