Aeon Co, Japan's largest supermarket operator, said it will acquire eight stores of Carrefour SA in Japan, marking the French retailer's retreat from the country.
The Aeon, based in Chiba prefecture, near Tokyo, said the Carrefour Japanese stores generated about ?50 billion (US$480.7 million) in sales last year, according to a statement to the Tokyo Stock Exchange.
Paris-based Carrefour's departure from Japan's ?14 trillion supermarket sector came four years after the world's second-largest retailer opened its first store in Japan. The purchase will help Aeon extend its lead in Japan, where supermarket sales have fallen for eight straight years.
"The Carrefour stores in the Kansai [western Japan] region will give Aeon a foothold to expand its business in the area," said Peggy Furusaka, co-head of credit research at BNP Paribas Securities in Tokyo. "Carrefour's Makuhari store can become Aeon's flagship outlet at its headquarters."
Carrefour is the world's second-biggest retailer after Wal-Mart Stores Inc, and has about 10,400 stores in 29 countries with about US$108 billion in sales last year.
Since Daniel Bernard, the company's former chairman and chief executive, said in September he wanted to raise 1 billion euros (US$1.3 billion) by selling some "underperforming" elements during this year, analysts have put the company's unprofitable Japanese business high on the list of prospects. Bernard was replaced last month by Luc Vandevelde, who has said he intends to proceed with the divestments.
Aeon, with more than 1,000 general merchandise stores and supermarkets in Japan, is seeking to add outlets and hire staff at a time when Japanese consumers are becoming more optimistic about the economy.
Last year, supermarket sales in Japan fell 3.5 percent from 2003 to ?14.2 trillion, marking an eighth straight year of declines, according to the Japan Chain Store Association.
For a supermarket chain operator, "it is important to pursue benefits from a larger-scale sales network," Aeon president Motoya Okada told Bloomberg in January.
Aeon's purchase of the stores, following four similar acquisitions last year, comes as rival Wal-Mart raises support for Seiyu Ltd, Japan's fourth-largest retailer. Wal-Mart, based in Bentonville, Arkansas, holds a 37 percent stake in Seiyu with an option to raise the stake to above 50 percent.
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