Tokyo Wal-Mart Stores Inc. has raised its stake in money-losing Japanese retailer Seiyu to 95.1%, the retailers said Wednesday. This move gives Wal-Mart managerial control of the chain and solidifies its foothold in an intensely competitive market.
Wal-Mart, which already owned 50.9% in Seiyu Ltd., offered to buy outstanding shares to gain full ownership. Wal-Mart hoped this move would speed management decisions for Seiyu's turnaround.
Since entering the Japanese market in 2002, Wal-Mart has been gradually raising its stake in Seiyu, which has about 400 stores nationwide. However, Wal-Mart has struggled to make money in this market. While mall-style shopping is gaining popularity in this marketplace, shoppers tend to go to smaller neighborhood stores for food and other daily needs.
Still, the move puts to rest questions about whether Wal-Mart will exit Japan. This rumor surfaced after the retailer sold its operations in Germany and South Korea last year.
Wal-Mart said it aims to acquire all remaining Seiyu shares, which will result in Seiyu's delisting from the Tokyo Stock Exchange.