Tesco to sell off its Japanese business
02 Sep 2011
Tesco Plc, the world's third-biggest retailer will soon join French retailer Carrefour and UK chemists Boots in pulling out of the Japanese market. While Carrefour and Boots have already abandoned their Japanese operations, the world's largest retailer Wal-Mart of the US is having a difficult time with its Seiyu subsidiary and has stopped investing in it, fuelling speculation of an eventual exit.
Tesco's announcement of plans to sell off its unviable Japanese business follows eight years of attempting to stabilise it.
According to analysts' estimates, Japan is the smallest of Tesco's 13 international businesses, consisting of 129 small stores in the Greater Tokyo area, employing around 3,900 people and making less than £500 million ($813.8 million) in annual sales.
"We have concluded that we cannot build a sufficiently scalable business," said chief executive Philip Clarke.
The chief executive said Tesco would start a formal sale process of its Japan business in the coming months, and in the meantime the business would continue as usual.
Tesco operates stores under its own name and the "Tsurakame" brand in Japan. It also has own-label product line and a fresh kitchen providing fish and other products for the Japanese market.
