Business / Corporate

Retailer Don Quijote shows interest in buying supermarket chain Seiyu from Walmart

Kyodo, Bloomberg

The president of discount retailer Don Quijote Holdings Co. expressed interest Monday in buying supermarket chain Seiyu GK from Walmart Inc.

“I’m interested if (Walmart) is serious about selling,” Koji Ohara said during a business strategy forum in Tokyo. “It depends on the content, but if it’s selling I’d like to carefully examine (the conditions).”

Sources close to the matter said last month that Walmart has decided to sell the troubled supermarket chain and had already been in talks with some retailers and investment funds.

Walmart forged a capital tie-up with struggling Seiyu in 2002, and made the Tokyo-headquartered chain a wholly owned unit in 2008. Seiyu has had a tough time turning its business around despite restructuring efforts, including job cuts and closures of unprofitable outlets, amid intense competition from online retailers.

A sale would be Walmart’s latest exit from a lower-growth market as it looks to shake up its overseas business and invest in places like China and India.

The world’s biggest retailer said last month it had sold an 80 percent stake in its Brazilian operations to private equity firm Advent International, exiting an underperforming business in its third major international deal since April.

In addition to competition from online retailers such as Amazon.com, Japan’s superstores are being squeezed by alternative chains such as convenience stores and discount drugstores in a sluggish consumption environment.

In January, Walmart said it was launching an online grocery service with Rakuten Inc. in what Rakuten CEO Hiroshi Mikitani said he hoped might be a precursor to greater global cooperation.

Walmart struggled to replicate the success of its low-price model with Seiyu, despite the introduction of an “everyday low price” pledge and frequent discounting.