SEVEN & i Holdings’s plan to split in two and expand abroad will help the retailer almost double group revenue, chief executive officer Ryuichi Isaka said in an appeal to shareholders as Alimentation Couche-Tard seeks to buy the Japanese convenience-store operator.
The retailer aims to reach 30 trillion yen (S$197 billion) in group sales by the 2030 fiscal year, up from 17.7 trillion yen in 2023, with a greater contribution from convenience-store operations in markets abroad.
Seven & i laid out plans earlier this month that will effectively split the company in two – A business focused on 7-Eleven, convenience stores and petrol stations, and another made up of less profitable retail operations. The company’s biggest-ever overhaul is designed to boost its value in the face of a buyout proposal from Couche-Tard that values Seven & i at about 7.1 trillion yen.
“Investors should expect global growth,” Isaka told analysts on Thursday (Oct 24) during an investor presentation. Executives are set to meet with key investors in the next week to lay out plans to restructure and expand.
For Japan, the goal is to surpass six trillion yen in annual domestic sales over the same period, Isaka said.
Seven & had rebuffed an earlier, lower offer by the Canadian operator of Circle K stores, saying that it undervalued the company, but has not yet responded to Couche-Tard’s latest proposal to pay US$18.19, or 2,777 yen, per share. Shares in the Japanese company were trading at 2,249 yen during morning trading in Tokyo on Thursday, below that price.
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Earlier this month, Couche-Tard’s top management came to Japan but were not able to enter negotiations with Seven & i. Chairman and founder Alain Bouchard said that he’s confident the Canadian company can address regulatory concerns.
In North America, Seven & i is interested in making further acquisitions in North America, Joe DePinto, who runs convenience store operations in the region, said during a presentation. Seven & i is pursuing new services such as improved digital services and electric-vehicle charging stations, he said.
“We are planning for the future but we recognise that this is going to take some time,” DePinto said.
Under the proposed restructuring plan, the convenience-store business will become a global company named 7-Eleven. With growth in Japan and North America weakening, Isaka and his management team are seeking to reassure investors that there’s more potential for greater expansion. BLOOMBERG
