Japan’s Aeon records consolidated net loss of $27.6 million, forecast profit for 2009-10

Japan's second-largest retailer, Aeon, has posted its first consolidated net loss in seven years of ¥2.76 billion ($27.6 million) for fiscal year ended February 2009, compared to a net profit of ¥43.93 billion logged a year earlier, due to weak consumer spending and special losses taken into account of its US firm The Talbots, Inc (See: Japan's second-largest retailer, Aeon, likely to record first net loss in seven years)

Aeon consolidated operating profit slid 20.3 per cent to ¥124.37 billion while revenue rose 1.2 per cent to ¥5.23 trillion from ¥5.167 trillion yen. The company booked a special loss of ¥37.9 billion on account of its US firm The Talbots, Inc

The sales of clothing and household goods declined sharply in the fourth quarter Aeon's president Motoya Okada said at a news conference.

To combat the recession, the company has made several plans and forecasts to rebound to profit this financial year.

Aeon Co plans to open 500 small supermarkets in cities by 2012 thereby increasing its customer base and will also increase its range of low-priced products and reduce the prices of some of its current products to cater to a wider consumer base.

In an effort to turn around its retail business, the company has shifted its strategy to open less expensive small stores in densely populated areas compared to its earlier concept of having large supermarkets located in suburban areas. Aeon Co currently operates about 30 such small stores on a trial basis.

Aeon Co. will also open 30 stores in China and other fast developing countries in Asia by 2010.

Aeon Co. predicted to post a consolidated net profit of ¥7.5 billion to ¥15.0 billion and an operating profit of ¥130 billion to ¥140 billion for the current fiscal year.