IndiaRetailBiz

Seiyu– the third largest Japanese operator of a number of supermarkets, shopping centers, and department stores in joint venture with the world’s largest retailer Wal-Mart, has reported big losses for the year ending December, 2007. This is the unit’s straight loss for the sixth year running.

The US retailer has invested about $2bn in Japan’s retail operator that has about 400 stores. Seiyu has yet to turn a profit under Wal-Mart’s direction.

Only, a year ago in 2006, the world’s giant retailer had to wind up its operation in Germany and South Korea. Many experts attribute this to the retailer’s inability to adopt to local requirements as the company is believed to be also facing difficulties in the U. K.

The net loss in Japan, which happens to be the world’s second-largest economy, is feared to be over twice the earlier forecast of ¥ 10.4 billion (nearly $200 million). In a sharp decline, amounting to over 90%, Seiyu has also brought down the forecast of operating profits from ¥ 4.6 billion to ¥ 400 million. Sales, during the year, are expected to decline from ¥ 963 billion to ¥ 952 billion.

“After pulling out of Germany and Korea it would be hard for Wal-Mart to raise the white flag in Japan. The market is simply too big for the US company to walk away. That would leave it out of three of the largest developed counties in the world,” says Douglas McIntyre of 24/7 Wall St.

Seiyu has attributed its losses to decline in demand of clothing, seasonal household products, and speciality products.

For its forays into India, Wal-Mart has entered into a joint venture with India’s telecom giant Bharti Enterprises.