Seven & I Holdings, the operator of the 7-Eleven convenience store chain, said Thursday its Ito-Yokado supermarket unit will cut the number of its stores by a quarter and quit the apparel business as the retail group presses ahead with restructuring to focus more on its convenience store operations.

The supermarket operator will close 33 unprofitable or low-profit margin outlets in Japan by the end of February 2026. There were a total of 126 as of the end of February.

Ito-Yokado will also consolidate its back-office operations with other Seven & I group supermarket operators to reduce costs as it seeks to strengthen its food business.

The main supermarket unit of Seven & I Holdings, which started as a clothing store in 1920, will terminate its clothing business in the face of severe competition with specialized clothing retailers, though it will continue to sell other companies' clothing at its outlets.

"We will focus on the growth of our convenience store business at home and abroad," Seven & I President Ryuichi Isaka said at a news conference.

The decision comes as the Ito-Yokado unit posted a net loss for the second straight year in the year ended February 2022.

Seven & I is under increasing pressure from ValueAct Capital, a U.S. investment company and an activist shareholder of the Japanese retailer, to focus on the mainstay 7-Eleven business.

The retail giant said in November that it will sell its struggling department store unit Sogo & Seibu to U.S.-based investment fund Fortress Investment Group for around ¥250 billion ($1.8 billion).

To strengthen its convenience store business, Seven & I bought Speedway, a U.S. convenience store chain and gas station network, for $21 billion in 2021.