Seven & i teams up with fellow retailer Izumi

TOKYO: Seven & i Holdings Co said yesterday that it would team up with Japanese retailer Izumi Co to jointly procure products and possibly operate some stores together.

The move is aimed at leveraging economies of scale at Seven & i’s Ito-Yokado general merchandise stores, which are facing tough competition from specialty stores, drugstores and e-commerce.

Hiroshima-based Izumi operates the You Me Town chain of shopping malls in western Japan.

“The biggest question when considering partnerships like this is ‘How are we going to keep up with the rapidly changing landscape’?” company president Ryuichi Isaka said at a press conference in Tokyo.

“We’re seeing a once-in-a-century shift right now and we can’t go it alone. We want to find partners that have the same values as ours, like putting customers first, so that we can continue working together through, for example, capital tie-ups,” he said.

Seven & i, which also owns the 7-Eleven convenience store chain, the same day reported a record consolidated net profit of 181.15 billion yen ($1.7 billion) for the year through February, up 87.2% from the previous year largely due to a US corporate tax cut.

The retail giant logged a record operating profit of 391.66 billion yen, up 7.4%, on operating revenue of 6.04 trillion yen, up 3.5% on strong convenience store sales at home and abroad.

For the year that started in March, it expects a 15.9% rise in net profit to 210 billion yen and operating profit of 415 billion yen.