 |
6-
9, December 2006 Pragati Maidan, New Delhi.
|
||
 |
|
||
 |
|||
|
Wal-Mart Stores Inc’s Japanese subsidiary, Seiyu Ltd, forecasted a return to profit this year as its core supermarket operations started to show recovery. Seiyu, owned 53% by the world’s biggest retailer, has been struggling despite total investments of more than $1 billion by Wal-Mart, amid intensified competition from rival supermarkets and other retailers in a mature market. Its same-store sales showed their first annual rise in 15 years in 2006 but were still below the company’s target. After Wal-Mart quit the South Korean and German markets last year, many market players speculated that it might leave Japan too because of Seiyu’s poor performance. But the US retailer has been saying it is committed to the world’s second-biggest retail market. Net of the group profit will most likely be 800 million yen ($6.70 million) for the year ended December 2006, against a 55.8 billion yen loss in 2006. It was the fifth straight year of losses. The 2007 targets compare with a consensus loss projection of 950 million yen by four analysts by Reuters Estimates. Operating profit is expected to be 10.6 billion yen in 2007, against a 3.2 billion yen profit last year, while sales are seen rising 3.3% to 992.1 billion yen. Seiyu’s 2006 results were well flagged because the company said in January it would fall deeper into the red than it first estimated. Seiyu has been trying to improve store operations and distribution systems using Wal-Mart’s expertise, but the company has never posted a net profit since the US retailer took a small stake in it in 2002. The Japanese company said it would continue with its reform efforts, including store remodelling and an improvement of its private brands. Seiyu mainly operates superstores through its group network of some 390 outlets, but unlike other Japanese retailers such as Aeon Co, it does not have finance or speciality store units to offset sluggish core operations. Shares in Seiyu plunged nearly 59 % last year, underperforming a 21% fall in the Tokyo Stock Exchange’s retailer subindex. As of 0511 GMT, Seiyu was up 2.5% at 164 yen, against a 0.18% decline in the subindex.
Date: 17-Feb-2007
|
|||
