Seven & i to refocus on convenience storesーNHK WORLD-JAPAN NEWS
Japan’s 7NI holdings has emerged from an aborted buyout bid with a new sense of purpose and so you the retail giant has announced some big changes. Yeah, it has Raja and it seems that the takeover attempt by Canada’s Alamant Tashan Kustar was the jolt 7 and I needed to rethink its business. Now the firm says it will refocus its efforts in its mainstay operation, the 7-Eleven convenience store chain. It plans to roll out another 1,000 outlets across Japan by fiscal 2030. a hefty addition to the 21,000 odd stores that currently dot the country. At the same time, the company will offload some of its less successful non-core businesses, including restaurants and supermarkets. To fund the change in strategy to fiscal 2030, 7ni says it will spend 3.2 trillion yen, around 22 billion. The goal is to increase annual revenue by more than 11%. All of this follows Aliman Tashon Kustard’s decision to withdraw its 47 billion dollar takeover attempt. The bid was pulled, but it seems to have prompted a bout of soularching at 7 and I have not really operated as an integrated global entity in the past. Each business unit did its own thing without a great deal of central oversight or even attempts at global leverage and coordination. Discus was previously an outside director at seminar. He took the top job in May when the firm was mired in poor results and besieged by Kashtar’s buyout attempt. Uh and uh Yuko the takeover proposal was the impetus that pushed 7 and I in a different direction. Yeah, you could say that. Now Kazahaya Takahiro is an analyst who studies Japan’s retail sector and he says the specifics of 7 and I’s plan are less interesting than the president’s remarks about governance. He clearly recognized that one of the main reasons for seven and I’s dismal performance was that the holding company wasn’t functioning properly. The fact the firm brought in Dus who wasn’t even working there to steer the ship shows there were no next generation leaders ready to step up and that’s a huge problem at a company so big. Kazahaya says it’s good the firm is being so open about the problems it faces within, but he’s less impressed by the details in its amended business strategy. The company is talking about events that will happen 5 years from now. It’s too early to say if it can achieve those things. The company’s financial results are dire now. So investors want to know what the company will do now to turn things around. Unfortunately, 7 and I had nothing to say about that. So, no dramatic revival of fortunes in the months ahead. Unlikely. Now, take a look at this. After Star made its takeover a bit, 7 and stock price started to climb. The Canadian company was offering up to 2600 yen a share. Compared that with the current price, just 2,50en, and you can see why investors are feeling agreved, right, Yuko? Surely they can take some positive from the comments from the new president, right? You know, Dus seems like a breath of fresh air. Well, he does talk a good game, but Kazahaya says investors shouldn’t get carried away. You know, Dus has only been in the job for about a few months, so it’s too early to say if he can deliver. And Kazahaya makes another interesting point that the challenges for Dus are fairly universal in Japan’s corporate sector. The problems highlighted by DUIS are not new for a globally operating company. What made his comments interesting was that they offered a window into one of Japan’s largest retailers, which is failing to meet required standards of governance. Recently, we’ve heard a lot of calls for improved governance in Japanese boardrooms, and we have actually seen some improvements. But there are still plenty of firms that are still failing the test and I won’t be surprised if they become targets for overseas buyers. So if uh 7 and doesn’t lift its game soon, it could find itself fending off another takeover attempt likely. And it’s not just seven and I a criticism we often hear about big Japanese firm is that they offer great products and services not because of the h how they are managed but in spite of it. So it many of them could find themselves in the fire of the line.
Japanese retail titan Seven & i is refocusing its energies in its core convenience store business. Yuko Fukushima asked an analyst what investors can expect next. #business #japan #conveniencestore
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