[TOKYO] Seven & i Holdings said that it will open 1,300 new international stores, mainly in the US, in an update to its mid-term plan after Circle-K operator Alimentation Couche-Tard dropped its 6.8 trillion yen (S$59 billion) takeover proposal.
The company said that it will also add 1,000 net new outlets in Japan as part of its growth strategy. The goal is to “satisfy changing customer needs with new formats and accelerate openings”, the operator of 7-Eleven stores said in a presentation released ahead of a briefing on Wednesday (Aug 6).
Stephen Dacus, who took over as chief executive officer earlier this year, is under pressure to deliver on a plan to streamline Seven & i around convenience stores. The failed deal has intensified pressure on the CEO to reassure investors sceptical of the company’s turnaround strategy, which involves narrowing its business focus to convenience stores, divesting lower-margin units, and aggressively returning cash to shareholders.
The yearlong pursuit of what would have been the largest foreign takeover of a Japanese company ended in acrimony last month. Couche-Tard accused Seven & i’s board of a “calculated campaign of obfuscation and delay”, while Seven & i argued that the suitor failed to take antitrust concerns seriously and lacked an understanding of how business is conducted in Japan.
Seven & i’s stock dropped more than 10 per cent in the days after Couche-Tard walked away. They have since recovered, but remain almost 20 per cent year, underscoring investors’ concerns over the turnaround plan.
The retailer’s recent history, punctuated by clashes with activist investors, underscores a pattern of reform driven largely by external pressures rather than internal initiative.
Even before Couche-Tard’s bid, Seven & i had a track record of implementing reforms under outside pressure. Two years ago, activist fund ValueAct Capital Management pushed to boost the company’s valuation and attempted unsuccessfully to oust then-CEO Ryuichi Isaka. The campaign helped fuel Seven & i’s decision to sell its Sogo & Seibu department stores to Fortress Investment Group in 2022 for 250 billion yen.
In 2016, concerns raised by activist fund Third Point over executive appointments resulted in the exit of former chairman Toshifumi Suzuki and elevated Isaka to the top post. BLOOMBERG
