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Wal-Mart Executive to Head Seiyu Unit

The retailer sends in new management as it raises its stake in the Japanese chain to 54%.

November 03, 2005|From Times Wire Services

TOKYO — A Wal-Mart Stores Inc. executive will take the helm of Seiyu Ltd., a Japanese retailer set to become a subsidiary of the U.S. chain in December, signaling Wal-Mart's determination to succeed in Japan's lucrative -- and finicky -- retail market.

Wal-Mart also said it was taking control of Seiyu and would raise its stake to almost 54% from 42%.

Seiyu announced Wednesday that Ed Kolodzieski, senior vice president and chief operating officer of Wal-Mart International, would become its new chief executive on Dec. 15 upon shareholder approval.

Kolodzieski, who has been a Seiyu board member since 2004, replaces Noriyuki Watanabe, who stays on as chairman.

Since arriving in Japan in 2002, Wal-Mart, the world's biggest retailer, has been gradually increasing its stake in Tokyo-based Seiyu, the nation's fifth-largest chain with more than 400 stores.

But Seiyu has lost money in the three years since, struggling to win over shoppers with a reputation for being both picky and trendy.

Other global retailers have also struggled in Japan. Carrefour of France, the world's No. 2 retailer, abandoned the country earlier this year.

Wal-Mart, which has international operations in Mexico, Germany, South Korea, Canada and elsewhere, seems intent on establishing itself in Japan, the world's second-biggest retail market.

"For Wal-Mart, this is an extremely important market," Jeff McAllister, senior vice president at Wal-Mart International told reporters in Tokyo. "Frankly we're optimistic about the future."

Under its partnership with Seiyu, Wal-Mart has been gradually cutting costs, remodeling stores and opening large-scale supermarkets, which are still relatively rare here. McAllister said those efforts would accelerate because Wal-Mart was not only boosting its investment but sending in new management.

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Associated Press and Bloomberg News were used in compiling this report.

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