Walmart Inc. plans to relist its Japanese business on the Tokyo Stock Exchange while retaining a majority stake, Walmart Japan's chief said Wednesday.
Speaking to more than 600 employees of its supermarket chain Seiyu GK at a town hall-style meeting, Walmart Japan President and Chief Executive Officer Lionel Desclee said the retailer has "a longer-term aspiration to list a minority stake" of the company. "We believe a Japan listing would empower Seiyu to accelerate the journey of building a strong, innovative local value retailer both in stores and online, while still enjoying the benefits of being powered by Walmart," Desclee said.
Judith McKenna, chief executive officer of Walmart's international division, accompanied Desclee at the meeting in Tokyo. "A potential public listing of Walmart Japan with Walmart retaining majority ownership would be aligned with our strategy of creating strong local businesses, powered by Walmart," she said.
One of Japan's largest supermarket chains, Seiyu was established in 1963, according to Walmart's website. Walmart acquired a 6.1% stake in the company in 2002 and then a majority interest in 2005. The Bentonville-based retailer subsequently bought all remaining shares, resulting in Seiyu being delisted from the Tokyo Stock Exchange in 2008.
Desclee, who took the helm at Walmart Japan in March, immediately had to counter long-standing rumors that its parent company was seeking a buyer for Seiyu. He reportedly told news media in Tokyo that Seiyu was "absolutely not" for sale, and a Walmart spokesman confirmed that his remark was "consistent with what we've been saying, that we continue to build our Japan business toward the future to meet the changing needs of customers there."
Other retail giants have struggled in Japan. Tesco PLC, which competes in the U.K. with Walmart's Asda, sold its 129-store Japanese unit in 2012. French retailer Carrefour S.A. sold its assets in Japan in 2005.
On Wednesday, Desclee presented a new, three-year business plan for Seiyu. Called the Spark Plan, it features priorities in four focus areas, according to a news release. Three of these aim to grow sales, while one entails cutting costs.
The new business plan calls for more emphasis on pricing and assortment, along with better serving the needs of local shoppers. Store remodels also are planned. And noting that commuters are increasingly turning to Seiyu for its deli and lunch takeout items, the chain plans to expand those offerings.
The Spark Plan also includes strengthening Seiyu's omnichannel offerings. While the release didn't provide details, Walmart Japan and Japanese online retailer Rakuten Inc. have started several joint ventures since announcing their strategic alliance in January 2018.
Seiyu's partnership with Rakuten is "bearing fruit" with increased sales at their online grocery delivery service Rakuten Seiyu NetSuper, according to the release. The service, which began in October, reached a record high for daily orders in June.
Finally, the company "will continue to focus on end-to-end operational efficiencies to further reinvest in lower prices, store upgrades, technology and marketing," the release stated.
Desclee met with key stakeholders across Japan to learn more about the company and its customers and to identify Seiyu's strengths and opportunities, according to the release. He then drew on these findings and worked with experienced Seiyu employees to develop the new business plan.
Walmart currently has 331 retail units in Japan. Under the Seiyu brand, it has 172 supermarkets, 88 hypermarkets and one general merchandise store.
Business on 06/27/2019
Print Headline: Walmart arm to relist stock in Japan