Japanese retail conglomerate Seven & i Holdings has agreed to purchase the 7-Eleven convenience store chain in Australia for €1 billion, further expanding its ownership of the brand.
According to ESM magazine, the Australian convenience and petrol retailer, owned by the Withers and Barlow families, kickstarted the process of selling the business – which consists of 751 stores – earlier this year.
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INDUSTRY LEADER
The deal will allow Seven & i to establish itself as “the clear industry leader in the Australian convenience store market, which has significant growth potential,” the Japanese company said in a statement. It added that it saw room for further growth by actively opening new stores in most Australian states.
Seven & i’s corporate predecessor first licensed the 7-Eleven franchise from US-based Southland Corp in 1973. However, the Japanese conglomerate later took over the US company in 1991 and now controls more than 80,000 7-Eleven convenience stores around the globe. Its sprawling retail empire also includes Speedway gas stations in the US and Ito-Yokado supermarkets in Japan.
In July, the convenience store operator reported a nearly 20% fall in first-quarter operating profit to 81.99 billion yen (€530 million) for the three months ended 31 May, from 102.37 billion yen (€660 million) in the same period a year earlier.
UNDER PRESSURE TO RESTRUCTURE
The company has, however, come under pressure from analysts and investors to restructure and shed underperforming assets. Earlier this year, Seven & i faced down a board challenge from US-based activist fund ValueAct Capital which had urged the company to consider a spin-off of the 7-Eleven convenience store chain.
Seven & i has since taken some steps to reshape its structure. This year it closed 14 Ito-Yokado supermarket stores in Japan, exited its apparel business, and completed a sale of its Sogo & Seibu department store unit.