Seven & I Holdings Co. has completed the sale of its Sogo & Seibu Co. department store chain, despite employee strikes at the flagship Tokyo store. The sale to Fortress Investment Group will close at an enterprise value of approximately ¥220 billion ($1.5 billion), which is ¥30 billion lower than initially announced.
As part of the deal, Seven & I will forgive ¥91.6 billion of the ¥165.9 billion it lent to the unit.
The sale has triggered a rare case of industrial action in Japan, with one of the largest Sogo & Seibu stores closed due to employee strikes. The workers are concerned about job security and potential changes to the department store’s business focus.
Fortress plans to collaborate with Japanese electronics retailer Yodobashi Holdings Inc., leading to concerns about space utilization within the department stores.
Fortress has committed to spending over ¥20 billion to renovate the Ikebukuro store and other facilities, aiming to maximize employment. This sale aligns with Seven & i’s strategy to enhance profitability by concentrating on its 7-Eleven stores and divesting less profitable businesses, such as Sogo & Seibu.
Seven & i operates around 85,000 stores globally and is focusing on its core food and convenience-store operations amidst challenging retail industry conditions.
In May, CEO Ryuichi Isaka was reelected to lead the company, defeating ValueAct Capital Management’s efforts to replace him and appoint its own board candidates.