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Seiyu expects Wal-Mart impact
TOKYO, Japan (Reuters) -- Japanese supermarket chain Seiyu Ltd, an affiliate of Wal-Mart Stores, said on Wednesday it expects to see an impact on sales and profitability after September from its alliance with the U.S. retailing giant. Seiyu, which is 37.7 percent owned by Wal-Mart, also said it plans to implement "Retail Link" -- the U.S. retailer's computer-linked management supply system that allows suppliers to monitor product sales in stores -- in three of its outlets from August. "We expect to see some results in terms of sales, profits, and profitability from our alliance with Wal-Mart from sometime after September," Seiyu President Masao Kiuchi told a news conference without offering any specific figures. Kiuchi was speaking after Seiyu shareholders approved the nomination of five Wal-Mart representatives to Seiyu's board of directors. Seiyu said last month it expects to post a consolidated net loss of 83 billion yen ($691 million) for the 2002-03 business year ended in February due to extraordinary losses on a department store investment and the sale of a finance unit. Japan represents potentially the biggest market for Wal-Mart's overseas operations, which now account for less than 20-percent of its total sales. In Asia, Wal-Mart also has opened stores in China and South Korea. Wal-Mart made a big splash when it announced last March its entry into the Japanese retail market through a capital alliance with Seiyu, but since then the world's biggest retailer has adopted a low profile and kept its plans for Japan under wraps. "While change is not yet visible at the store level, we are making solid progress," said Jeff McAllister, who is heading up Wal-Mart's operations in Japan. Instead of opening shopping centers in rural Japan, Wal-Mart has been working on improving logistics at Seiyu's 400 stores nationwide, meeting local suppliers and learning the ropes of a very difficult retail market. Carrefour, Europe's top retailer, had a rough time when it jumped into the Japanese market with its first superstore two years ago, and analysts said it sorely lacked a local partner. In December, Wal-Mart paid 52.06 billion yen for 192.8 million Seiyu shares, raising its stake in the firm to 37 percent from 6.1 percent. Seiyu, which also said it had closed 13 unprofitable outlets last year and planned to close or "scrap and build" eight new stores this year, saw its shares gain 1.57 percent to 258 yen on Wednesday. That compared with a rise of 1.37 percent in the Nikkei 225 average. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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