TOKYO — Japanese retailer Seven & i Holdings Co. is selling department store chain Sogo & Seibu Co. to a U.S. investment fund, even as the labor union went on strike ahead of the announcement Thursday.
The transfer to Fortress Investment Group will be completed Friday, according to Seven & i Holdings. The decision came at a board of directors meeting. The proposed sales price is 220 billion yen ($1.5 billion) but won't be final until the transfer’s completion set for Friday.
Separately, some of Sogo & Seibu’s debts, or nearly 92 billion yen ($630 million), will be forgiven, the company said in a statement.
Some 900 striking employees were marching, holding signs and handing out leaflets on the streets near the main Seibu department store in Tokyo, where the shutters were closed.
Disorderly strikes and protests are rare in Japan, and the strikers apologized on camera in Japanese TV news reports, for any inconvenience they may be causing the public. Some train strikes have been largely symbolic because the trains still run, given that so many urban workers depend on public transport to get to and from work.
The Seibu deal was postponed since it was first announced in November because of such opposition.
“We deeply apologize to all stakeholders including customers, local people, business partners and employees for the worries and inconvenience caused by the strike conducted by the Sogo & Seibu Labor Union today. Sogo & Seibu will continue collective bargaining and discussions with the Sogo & Seibu Labor Union, and the Company will also continue to provide support and cooperate to an appropriate extent on such discussions,” Seven & i Holdings said in a statement.
Japanese media reports said Yodobashi Camera Co., an electronics chain related to Fortress, may set up in the department store locations.
The Seibu & Sogo retailers total 10 outlets nationwide. Although the demise of department stores has hit Japan far later than in some other nations, like the U.S., their clout has been waning with the advent of online shopping.
Seven & i Holdings also has under its wing the 7-11 convenience store chain, as well as Ito-Yokado, a grocery chain that remains relatively popular, and Loft, which sells stationery and home knickknacks.
The company said it will leverage its strength in convenience stores as well as food stores to reshape its business.
New York-based Fortress Investment Group LLC was founded in 1998 and manages about $44.7 billion of assets.