Local retailer buys out Carrefour’s Japan outlets

TOKYO, March 10 (AFP) – Japan’s largest retailer Aeon said Thursday it had reached an agreement to take over the local outlets of Carrefour of France, the world’s second-largest retailer after US giant Wal-Mart.

The deal will help Aeon expand its operations while ending months of speculation that the French firm was trying to exit the highly competitive Japanese market after struggling to turn a profit.

“Today, Aeon and Carrefour S.A. of France agreed on a strategic business tie-up,” the two companies said in a joint statement.

They said Aeon would buy all the shares in Carrefour Japan, which opened its first store in December 2000 and now has eight outlets in the country.

The transaction would help Aeon develop “hypermarkets”, large-scale outlets combining department stores and supermarkets.

“Aeon will also have the exclusive right to use the Carrefour brand in Japan,” the firms said.

Carrefour’s decision to withdraw from the Japanese market comes at a crucial time for the world’s second-largest economy, which many economists believe is getting back on track after slipping into a mild recession last year.

Backed by an improving labour market, consumer spending has shown signs of recovery even as growth in exports, a driver for overall economic growth, has slowed in recent months.

Spending by salaried households, which account for about 60 percent of overall household spending, rose 2.6 percent in January, the biggest increase since July last year, official data showed.

However in terms of earnings, major retailers in Japan operating general merchandise stores have been struggling to secure stable profits.

Aeon has cut its group profit forecast for the year to February 2005 to JPY 56 billion (EUR 400 million) from the JPY 66 billion (EUR 472 million) projected earlier although it still expects record sales and profits for a fifth consecutive year.

Ito-Yokado, ranked second in Japan, has also revised down its year to February profit forecast to JPY 15 billion (EUR 107 million) from JPY 62 billion (EUR 443 million).

Seiyu, a medium-sized retailer in which Wal-Mart Stores holds a 37.8 percent stake, posted a JPY 12.3 billion (EUR 88 million) net loss in 2004 as it accelerated structural reforms to fit in with the retail system of its giant US partner.

Before the announcement was made, Aeon’s share price closed JPY 2 (EUR 0.14) or 0.11 percent lower at JPY 1,761 (EUR 12.60) on the Tokyo Stock Exchange Thursday, when the benchmark Nikkei-225 index fell 0.85 percent lower.

© AFP

Subject: French News