Seven & I Holdings has finally announced plans to sell its loss-making Sogo & Seibu department-store business – but denies it is caving to activist shareholder pressure.
“We will consider various options including selling shares as we advance structural reforms and search for the best owners”, Ryuichi Isaka, president at Seven & I said during an online earnings briefing.
Following confirmation last January that the company was “examining all possibilities” for the business’ future, on Thursday it said it had retained a financial advisor to conduct a strategic review of the unit.
Last year, Sogo & Seibu reported a loss of US$28.2 million. The department-store division has sold its stake in sportswear retailer Oshman and a quarter of its shares in furniture and homewares chain Francfranc. Based on that, together with further restructuring and stores closures now planned, Seven & I is projecting a 31.6-per-cent fall in revenue for the division in FY2023.
Net operating income for the parent group was $1.7 billion, largely fuelled by the company’s 7-Eleven convenience-store business. The company also got a revenue boost from its $21 billion acquisition of the 3854-store strong North American c-store business Speedway in May of last year.
The company has been criticised heavily in recent years by activist investor ValueAct Capital which wants the successful convenience store operator to shed both the department-store business and its Ito-Yokado Japanese supermarket division which it sees as undermining the success of the rest of the business and diluting return on investment.
Ito-Yokado’s operating income fell to $12.9 million in the year to February 28, down 79 per cent year on year.