The world's largest retailer, Wal-Mart Stores, Inc. (NYSE: WMT), has received shareholder approval from Japan's Seiyu Ltd. to go ahead and complete the purchase of the Japanese grocery retailer. Wal-Mart already owned a majority of Seiyu and now will buy the rest of what it doesn't already own.

Wal-Mart must believe in the future potential of the company since it had a disastrous 2007 and what could be considered to be a murky past and a potentially shaky future. Ever since it bought a stake in Seiyu back in 2002, the Japanese company has not turned a profit (interestingly enough), and Wal-Mart's attempt to turn around Seiyu's fortunes won't be easy given its past history of ownership in the company.

Analysts believe that Wal-Mart's "low prices" approach culturally won't work in Japan, where consumers equate low prices with low quality. Wal-Mart's inability to misunderstand the German and South Korean consumer culture led to the retailer's exit in both those countries in 2006, so why does it believe it can succeed in Japan?

Wal-Mart executives think the low price model could solidify a fragmented consumer marketplace in Japan, saying "Japan is quite different from Germany or South Korea. We realize they aren't going to sacrifice quality, and our goal is to provide the best value combined with the quality they expect." That's much easier said than done, so this may yet end up being just another international experiment for the world's largest retailer -- more than anything.

Wal-Mart Stores, Inc. (NYSE: WMT), which has been on a share-buying rampage in the last month or so in procuring publish shares of struggling Japanese supermarket chain Seiyu, now has another collection of shares in its pocket.

Japanese trading house Sumitomo Corp. has announced that it will sell the 6.37% stake it has in Seiyu to Wal-Mart, as the world's largest retailer almost completely concludes its quest to own every public share of Seiyu. Wal-Mart needs an international market that it owns to work as U.S. growth slows and investors start clamoring for more from the retailer. Wal-Mart shares have staggered at near the same level for over five years.

While Japan is the world's second largest market after the U.S., perhaps Wal-Mart will put a whole load of new resources into that country to ignite growth there and pacify investors who have looked down on Wal-Mart's U.S. business model in the last few years. Seiyu, though, has done horribly in the last half-decade, losing money for six straight years. Wal-Mart has a lot of work to do to right those performance figures, and it won't be easy -- even for the world's largest retail chain.

Wal-Mart (NYSE: WMT) will spend $878 million to buy the remaining outstanding shares it does not already own in Japanese supermarket unit Seiyu.

According to Reuters, "The world's largest retailer has invested more than $1 billion in Seiyu since 2002." The Japanese retail operation has lost money for five years. Wal-Mart will pay public shareholders a 61% premium for their shares.

Wal-Mart has exited some markets, such as Korea, because of poor results. But, Japan is one of the world's largest retail markets, and the company may feel that it cannot walk away from an opportunity there when sales at home.

And that may be the reason Wal-Mart would take the risk. A large portion of the company's growth last quarter came from outside the U.S., and the world's largest retailer has become an international company. Its strongest market is Mexico and it is also doing well in China. But there is no telling what could happen in the world's most densely populated country. The government has already put a union into the company's stores there.

Japan needs to work for Wal-Mart. There are only so many big markets left.

Douglas A. McIntyre is an editor of 247wallst.com

Just like its loss in 2006, Wal-Mart Stores Inc.'s (NYSE: WMT) Japanese Seiyu unit (53% owned by the retailer) is being seen as having a loss in the first six months of 2007 on the back of lagging sales. Instead of posting a profit, the international Wal-Mart subsidiary will post a loss and bring into question Wal-Mart's fledgling international operations once again. Seiyu reports actual results on August 14.

Weaker-than-expected clothing and electric appliance sales are to blame here according to rampant speculation. As such, Wal-Mart's thinking of making up for problems with downtrodden U.S. sales using international divisions has hit a black-eye moment here. Sure, many of the global retailer's international operations are doing well, but not this one. Let's hope Trust-Mart in China and Bharti in India fare a little better throughout 2007.

Seiyu's loss of $17-25 million for the first six months of 2007 recap a startling 1% same-store sales drop from the year-ago period. What caused this minor plummet? In addition to the lower-than-expected sales, weather was named as a reason for lowered sales. With Wal-Mart's apparel chief recently resigning from the company, perhaps clothing sales will recover some time in 2008.

Wal-Mart Stores, Inc. (NYSE:WMT) has operations across the globe through its own brand and the ownership stake it has in other brands and companies, like Asda in Europe. How do those areas -- outside the U.S. -- perform on an annual basis? As Wal-Mart scurries for every last penny saved here in the U.S. while newly energized competitors stomp on its sales, can international markets and the resultant sales save a little piece of glory for the world's largest retailer?

If you were to look at Wal-Mart's Japanese operations, a pretty picture would not really be painted here. Seiyu -- Wal-Mart's Japanese unit -- indicated yesterday that it would fall deeper into the red for 2006 than it first estimated. Read: Seiyu will have a much larger loss than originally forecast.

Should Wal-Mart just get out of Japan like it did in Germany and South Korea? Perhaps -- because Seiyu will mark its fifth straight year of losses despite investments of more than $1 billion by Wal-Mart, which owns 53% of the Japanese retailer.