Japanese Parent Wants to take 7-Eleven Private

Discussion
Sep 02, 2005
George Anderson

By George Anderson

Seven-Eleven Japan Co. said yesterday it is looking to purchase the remaining 27.3 percent stake it does not own in 7-Eleven
Inc.

7-Eleven Inc., based in Dallas, has said it has appointed a special committee of its board to consider the $1.2 billion cash
offer. It expects the committee to make its recommendations to shareholders on or before Sept. 19.

The reason for the takeover bid, reports The Associated Press, is Seven-Eleven Japan said believes “7-Eleven must boost investment
in its merchandising, store renovation, distribution and logistics systems, and information systems. The increase in investment, however, is likely to result in lower growth and
profitability for 7-Eleven in the short term.”

Moderator’s Comment: What are your thoughts on Seven-Eleven Japan Co. assuming control of 7-Eleven and taking it private?

As a public company, 7-Eleven, the reasoning goes, would lose investment because its prospects are muted by the need to invest in the business. By taking
it private, Seven-Eleven Japan, which is 51 percent owned by Ito-Yokado, will be able to make those investments without the concerns of what analysts and institutional investors
might want.

George Anderson – Moderator

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

7 Comments on "Japanese Parent Wants to take 7-Eleven Private"


Sort by:   newest | oldest | most voted
Peter Fader
Guest
15 years 5 months ago

7-Eleven Japan is a great retail success story that is largely under the radar in this part of the world. If they can do the same kinds of things here in the US that they’ve done in Japan, it would be terrific. All retailers have something to learn from them.

George Anderson
Guest
George Anderson
15 years 5 months ago

Wall Street is concerned with what it gets. 7-Eleven Japan will be concerned with what it builds. A great move for the 7-Eleven U.S. business.

Mark Lilien
Guest
15 years 5 months ago

If the management continues to emphasize franchise ownership, this will be a great investment. Labor problems and capital investment will be minimized. If they plan to roll out more company-owned stores, profitability will be very poor. Being a franchisor is a way of outsourcing labor, and labor issues in retailing are major headaches not easily solved.

Al McClain
Guest
Al McClain
15 years 5 months ago

The only disturbing part of this story to me is the underlying theme that Wall Street won’t support public companies who investment-spend for long-term growth. Could this be why many regional and independent supermarkets are fairing better than several nationals at the moment?

Bob X
Guest
Bob X
15 years 5 months ago

As W. E. Deming said, “Change is not a requirement because survival is not mandatory.”

John Weeks
Guest
John Weeks
15 years 5 months ago

Here is the bottom line… SEJ has done a fantastic job in approaching retailing their way. They are so far ahead of the USA in understanding their customer needs, and predicting their future needs, and building a company that can be, and indeed is, reactive to their needs. They see the possibilities here but realize that in order to duplicate the effort, a lot — I mean a lot — of money needs to be spent.

I don’t have a problem with their move to control their own destiny. I believe Jim Keyes and his core executive team will agree as well. Jim knows that he does not have the capital or the cash flow to go it alone; and new funds won’t come from anywhere else. My bet is that Jim is jumping up and down with glee.

My prediction? This is a fantastic move that will further distance 7-Eleven as the premier retailer in the customer satisfaction industry.

Charles Tellis
Guest
Charles Tellis
15 years 4 months ago

Any one who has done their homework will understand SEJ underlying motives. 7dream.com is a SEJ venture that has been most successful, driving e-commerce through the 7-eleven Konbini (convenience store). 7dream.com uses existing supply chain infrastructure to deliver Internet goods (hello FEDEX, UPS) to 7-eleven stores for pick-up by the consumer. Japanese consumers place orders online, pay and pick-up at the 7-eleven Konbini. SEJ logistics are very efficient, delivering to stores several times a day. Often customers place orders (via the Internet) while at work and pick-up the item on the way home. Tens of thousand of multi-media kiosks have been installed in Konbini’s throughout Japan, aimed at e-commerce dollars. At the Japanese Konbini one can do a number of things, from purchase airline tickets, download music, pay utility bills, pay for Internet goods and services, etc. This is what SEJ intends to do here, American style (in a huge way). Last I heard SE rejected the offer but I suspect the Japanese will make another attempt sooner or later.

wpDiscuz

Take Our Instant Poll

Good deal or bad - 7-Eleven going private?

View Results

Loading ... Loading ...