Business

Walmart eyes listing Japanese supermarket unit Seiyu to raise funds for expansion

Kyodo

Walmart Inc. aims to list its wholly owned Japanese supermarket unit Seiyu G.K. to raise funds for the retail chain’s expansion in Japan, the head of its local subsidiary said Wednesday.

After a meeting with employees to explain Seiyu’s medium-term strategy, Lionel Desclee, the president and CEO of Seiyu and Walmart Japan Holdings K.K., said in a statement that the U.S. retail giant will offer less than 50 percent of its shares to the public, without specifying a time frame.

Walmart has not decided whether to list Seiyu itself or its parent, Walmart Japan, a spokesman for Walmart Japan said.

There were reports last year that Walmart was in talks with some retailers and investment funds to sell Seiyu. Walmart later said it “has not made a decision to sell Seiyu” and that it is “not in any discussions with prospective buyers.”

Desclee, who assumed his posts in March, has said Walmart aims to strengthen Seiyu’s operations over the next 10 years.

Walmart forged a tie-up with Seiyu in 2002 and acquired the Tokyo-based firm in 2005, making it a wholly owned unit in 2008.

The U.S. retailer will keep its majority stake in Seiyu after the listing, Walmart’s international division head Judith McKenna said in a statement Wednesday. The company also announced a mid-term business plan to offer lower prices, better products and grow e-commerce sales.

Walmart has been reshaping its international operations over the past year to focus on high-potential markets like India and China. In Japan, where it has failed to gain traction against local rivals like Aeon Co. and Seven & I Holdings Co., there has been speculation that the Bentonville, Arkansas-based retailer was preparing to sell Seiyu, which the company has repeatedly denied.

“It’s hard for me to imagine what their strategy is,” said Mike Allen, an analyst at Jefferies Japan, of Walmart. “It’s a difficult environment right now particularly for big box retailers because they are — like everywhere else in the world — getting hit by online retailing and have fixed costs that are very difficult to control.”

Genya Murata, a spokesman for Seiyu, declined to comment on the timing of the listing. Seiyu stores currently operates 334 stores in Japan.

Walmart, which first invested in Seiyu in 2002 and took it private in 2008, has been investing in building up digital operations globally as it faces cost pressures and sluggish growth in its home market. Last year, it sold a majority stake in its Brazilian business and spent $16 billion to acquire India’s e-commerce leader, Flipkart Group, in its biggest-ever deal.

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