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If Seven & i Holdings Co., which has received a takeover proposal from a foreign company, is to stick to operating independently, it will be essential to accelerate its growth.
It is hoped that the change in top management will be an opportunity for the company to rethink its overseas strategy.
Seven & i announced that President Ryuichi Isaka will step down and Stephen Hayes Dacus, an outside director of the company, will assume the post. Dacus plans to take office as the new president after a general shareholders’ meeting in May.
As its future growth strategy, the company also announced it will list its subsidiary responsible for convenience store operations in North America by the latter half of 2026.
Rather than accepting a takeover offer from leading Canadian convenience store operator Alimentation Couche-Tard Inc., it can be said that Seven & i has clarified its intention to pursue its growth independently.
The funds to be obtained through the listing and other means will be reportedly used to buy back a total of ¥2 trillion of the company’s stock. However, the company will be tested as to whether it can be strategic in mergers and acquisitions and other activities.
Seven & i has been on the defensive since the takeover bid by Couche-Tard surfaced in summer last year. The founding family even considered taking the company private through a management buyout, in which a firm’s management purchases its own shares, but it gave up the plan due to difficulties in securing funds estimated at ¥9 trillion.
The Seven-Eleven convenience store chain, the core of Seven & i’s domestic business, has more than 21,000 stores and has become a part of the infrastructure that supports the lives of people in a wide range of generations. The public is highly interested in the tug-of-war that began following the takeover offer and how the stores would be managed if they were under the umbrella of a foreign company.
In the domestic convenience store industry, which is said to be saturated, it is important to maintain stable operations in order to stimulate new demand.
Since becoming president in 2016, Isaka has expanded the convenience store business in the United States. He has also promoted structural reforms through such means as the sale of its unprofitable department store operator Sogo & Seibu Co. to an investment fund and the separation of Ito-Yokado Co. from its management.
However, Seven & i’s net profit for the period between March and November 2024 was only ¥63.6 billion, down 65% from the same period in the previous year.
Seven & i’s recent stock prices were more than 20% lower than the acquisition price offered by Couche-Tard. As Seven & i became an acquisition target due to the sluggish growth of its stock prices, the company has no choice but to regain the confidence of investors through management improvement measures.
The overseas convenience store business accounts for about 70% of Seven & i’s total sales. The major challenge is to rebuild its business in the United States, where it has about 13,000 stores, the largest number of any convenience store chain in the country. This is because the company is clearly struggling in the United States due to the recent rise in prices.
Dacus has experience as an executive at Walmart Inc. of the United States and is well-versed in the situation in that country. It is necessary to grasp the needs of the market in detail.
