Wal-Mart to enter Japan through local partner
TOKYO Wal-Mart Stores Inc. has no plans to open its own "superstores" in Japan, and will concentrate instead on working with its new local partner, a senior executive said yesterday.
"We've got a relationship here, and I think we'll focus on the relationship that we already have," Wal-Mart Senior Vice President Jay Fitzsimmons told CNBC Asia Pacific. "I don't see us developing a separate set of stores."
The world's biggest company said last month it was buying a strategic stake in supermarket operator Seiyu Ltd.
The tie-up with Seiyu is similar to Wal-Mart's strategy in Mexico in 1991, which marked the company's first foray into an international market, Fitzsimmons said.
Wal-Mart expanded its small joint venture with a Mexican retailer and "eventually took controlling interest in the company," he said.
Wal-Mart initially will pay about $46 million for a 6.1 percent stake in Seiyu, with the option of injecting as much as $2 billion of new equity to raise its stake as high as 66.7 percent by 2007.
Japanese trading house Sumitomo Corp., Seiyu's biggest shareholder, will invest $38 million in new shares, raising its stake in Seiyu to 15.6 percent.
Although Japan is struggling to emerge from its third recession in a decade, its personal financial assets make the country a lucrative target for foreign retailers.
Wal-Mart joins a lineup of international hopefuls that includes membership warehouse store Costco Wholesale Corp. and French supermarket operator Carrefour SA.
The two entered Japan without local partners, and have failed to achieve their initial sales targets because of sluggish growth in customers and per-customer sales.
For the year ended Jan. 31, about 16 percent of Wal-Mart's $218 billion in sales came from outside the United States.