Seven & I Holdings Co. is in talks with J. Front Retailing Co. over the sale of Sogo Co.'s Shinsaibashi store in Osaka, sources said Tuesday.
Seven & I and J. Front Retailing are expected to reach a basic accord on the deal possibly this month, and the sale of Sogo's flagship department store is likely to be completed around summer for tens of billions of yen, the sources said.
Because the Sogo and Daimaru stores in Osaka's Shinsaibashi shopping district are adjacent, the envisioned sale would create a giant department store with a floor area of 77,000 sq. meters.
J. Front Retailing was formed through the 2007 merger of Daimaru Inc. and Matsuzakaya Holdings Co.
Seven & I wholly owns Millennium Retailing Inc., which wholly owns Sogo and Seibu Department Stores Ltd.
Millennium Retailing and the two subsidiaries are to merge Aug. 1.
With 28 department stores across the country under its wing, industry analysts have said Millennium Retailing needs to streamline its store lineup.
In a related development, Seven & I is considering transforming two Seibu outlets in Hokkaido into other commercial facilities consisting of supermarkets and specialty stores to lure more consumers, the sources said.
Sales at the two department stores, located in Sapporo and Asahikawa, have been slumping and the planned realignment is part of the retail giant's effort to streamline business amid lackluster consumer spending, they said.