Not only has Wal-Mart Stores, Inc. (NYSE: WMT)'s Japanese-based Seiyu Ltd. unit had a loss for the first half of 2007, but now the subsidiary looks to take a loss for the entire year, according to company. Seiyu said this week that it is planning on taking a full-year loss for calendar 2007, which would give it six straight years in a row without a penny of profit.Questions immediately come to mind: Will Wal-Mart get out of Japan and sell Seiyu completely to cut its losses? After all, it exited Germany and South Korea in 2006 after many bad financial performances in those countries. It cut its losses there and escaped from the doldrums of loss -- why not in Japan? Hard to tell at this point, but the world's largest retailer did not respond to speculation that it would exit the Japanese market.
But what do you think if you're a Wal-Mart shareholder? The company has poured more than $1 billion into Seiyu (which has 393 stores in Japan), with not much to show for it except occasional upticks in sales that make for little else besides decent headlines.
Wal-Mart has found good look recently in China with the Trust-Mart partnership and in India with partner Bharti, but it's just not cutting the mustard in Japan. Will Wal-Mart continuing propping its Japanese unit up with more money, hoping for some kind of profit on the horizon? Your guess is as good as mine. Six years is a long, long time in the retail biz.
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Reader Comments (Page 1 of 1)
8-01-2008 @ 11:24AM
Andrusha said...
Seiyu (and hence, Wal-Mart) is still selling whale meat from the ridiculed japanese "scientific research" whaling program. I sincerely hope Wal-Mart dumps Seiyu, which in turn may be the end-of-days for the japanese chain.
8-15-2007 @ 3:40AM
Fran Pipkin said...
Walmart is a sinking ship. Very poor leadership. From the top to the bottom. It is time to kick them out and get a new and fresh direction, otherwise in time there will be no Walmart.