Seven & i Holdings Co. plans to sell its department store unit Sogo & Seibu Co. due to plummeting business amid the coronavirus pandemic and increased competition with online shopping operators, it said on Monday. sources familiar with the matter.
The plan emerged as ValueAct Capital, a US investment firm with a 4.4% stake in Seven&i, is stepping up pressure on the major Japanese retailer to sell the department store business.
Photo taken in April 2019 shows the Seibu flagship department store in Tokyo’s Ikebukuro district. (Kyodo)
Seven&i, the Tokyo-based parent company of Seven-Eleven Japan Co., is expected to speak with the San Francisco-based ValueAct and other shareholders on issues including the price and timing of the planned Sogo sale. & Seibu.
With Seven&i struggling with even the most profitable unit in the convenience store sector, the company will focus on declining department stores to convenience stores in Asia and other foreign countries, the sources said.
In an open letter to Seven&i’s board dated last Tuesday, ValueAct said, “The company is strategically unclear and grossly underperforming its potential.”
“If Seven&i focuses on 7-Eleven, it can become the global champion in a growing industry,” the letter said.
ValueAct, which bills itself as “the largest actively managed institutional shareholder in the company (Seven&i)”, is expected to make proposals at a general meeting Seven&i plans to hold around May.
Sogo & Seibu operates 10 stores across Japan, including the flagship Seibu department store in Tokyo’s Ikebukuro district. The number of outlets, however, fell by 28 in October 2009.
The company had revenue of 430.6 billion yen ($3.7 billion) in the fiscal year that ended in February last year.