TOKYO : Wal-Mart said it was sending in a US executive to shake
up Japan's Seiyu, which the US behemoth will soon control, as the
firm's losses almost doubled in the nine months to September.
Seiyu said its sales remained sluggish as the net loss reached
17.53 billion yen (150 million dollars) in the period. The company
said its net loss would be 13.5 billion yen for the full year,
worse than the earlier projected 7.5 billion yen.
Wal-Mart, seeking a foothold in the world's second largest economy,
said in September it would take a majority stake in loss-making
Seiyu.
The move raises the prospect that Wal-Mart will try to bring its
style of low-cost megastores to Japan, whose brand-conscious
consumers prefer smaller shops.
"Seiyu's performance in the third quarter has been disappointing
but we remain confident in the company's long-term future," Mike
Duke, vice chairman of Wal-Mart International, said in a
statement.
The US giant, which is trying to counter image problems at home
over how it treats its workers, will send in one of its top
executives to the Japanese firm.
Seiyu said its board approved Ed Kolodzieski, currently chief
operating officer of Wal-Mart International and a Seiyu board
member, to become president and chief executive officer as of
December 15.
He will work with Seiyu chairman Noriyuki Watanabe, who has been
serving as chief executive officer since Masao Kiuchi stepped down
earlier this year to take responsibility for a continued
slump.
"We believe that Ed's operational and international experience
combined with the seasoned management of Noriyuki Watanabe will
provide strong leadership for Seiyu," Duke said.
Wal-Mart will take 53.56 percent of Seiyu's voting rights in
December, up from the current 42.48 percent, Seiyu said.
Seiyu-name sales in the July-September quarter fell 1.4 percent,
better than a 2.0 percent drop in April-June and 7.1 percent
decline in January-March, as the group improved management and
reduced product shortages.
But the profit margin "came in under plan due to a high level of
promotions and markdowns in a highly competitive environment,"
Seiyu said.
- AFP /ct