August 13, 2018 / 6:46 AM / 6 days ago

Japan's Don Quijote interested in buying Walmart's Seiyu

TOKYO (Reuters) - Japanese discount retailer Don Quijote Holdings Co Ltd (7532.T) said it would be interested in buying Seiyu if Walmart Inc (WMT.N) puts the Japanese supermarket chain up for sale, as it expands its presence in the domestic market.

Japanese discount retailer Don Quijote Holdings' logo is seen at its store in Tokyo, Japan, June 18, 2018. REUTERS/Kim Kyung-Hoon

This comes after business daily Nikkei reported last month that the U.S. retail giant would offload its Japanese unit.

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“If it came up for sale we would be interested and it is attractive,” Don Quijote Chief Executive Koji Ohara told a news briefing on Monday.

Walmart has struggled to replicate the success of its low-price model with Seiyu, which has more than 300 stores, and a sale would mark its latest exit from a low-growth market to shake up its overseas business and invest in places like China and India.

A Walmart spokesperson, however, said the retailer has not decided to sell Seiyu, is not in talks with prospective buyers and is continuing to develop the business, reiterating what the company had said after the Nikkei report.

Last week, Don Quijote reported its 29th straight year of sales and profit growth. The chain is targeting 500 stores in Japan by 2020 from 420 currently but has struggled to find sites in some areas.

“If you don’t have real estate you can’t do retailing. In addition to its human resources, Seiyu has many locations that you cannot get your hands on,” said Ohara.

Don Quijote shares ended up about 6 percent before the comments were reported, while the broader index .N225 closed down 2 percent.

Reporting by Sam Nussey in TOKYO; Additional reporting by Ishita Chigilli Palli; Editing by Himani Sarkar

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