Seven & i Holdings Co. said Wednesday it will spin off and list its Ito-Yokado supermarket operations as early as fiscal 2027 as part of efforts to drive the struggling business's growth by leveraging external capital.
The spinoff will allow Seven & i to focus its resources on its cash cow Seven-Eleven convenience store business. The Japanese retail giant, which bought the U.S. convenience store chain Speedway LLC in 2021, is considering more acquisitions in North America, it said.
"We have concluded that it is best (for the supermarket business) to be able to make investments for its growth on its own," Seven & i President Ryuichi Isaka told reporters in Tokyo.
Seven & i will continue to hold a stake in the unit even after the share sale and will maintain collaboration between the supermarket and the convenience store businesses in the area of food development, it said.
The supermarket unit has been undergoing a major restructuring in recent years that has involved the closure of unprofitable stores and an exit from its apparel business, amid increasing competition with online retailers and discount stores.
The move follows ValueAct Capital, a U.S. investment fund and an activist shareholder of the Japanese retailer, demanding last year that the company completely separate its convenience store operations from its other businesses to increase corporate value.
Facing such pressure, Seven & i sold its struggling department store unit Sogo & Seibu Co. to U.S. fund Fortress Investment Group LLC in September last year.
Separately, Seven & i said its group net profit for the year ended February fell 20.1 percent from a year earlier to 224.62 billion yen ($1.5 billion) on sales of 11.47 trillion yen, down 2.9 percent.
