Sunday , December 5 2021

Walmart is retiring worldwide to focus on e-commerce


Walmart Inc. the company threw in the towel in Japan after 18 years, selling most of its stake to a local supermarket chain and continuing to withdraw from slow-growing markets around the world in favor of the e-commerce game.

KKR & Co. the privately held company will buy 65% ​​of Tokyo’s Seiyu GK in a deal that values ​​329 stores and a chain of 34,600 employees at more than $ 1.6 billion, the companies said. Walmart will take 15%, and Rakuten Inc. 4755 Japanese internet companies from 1.19% to 20%. Walmart will also keep a seat on the board.

Walmart has sold three foreign stakes in less than seven weeks, each to the detriment of some financial problem.

In October, in Bentonville, Arkian, Giant by Asda Group Ltd. He agreed to sell the UK food chain to a private investment group in an agreement with Asda as the equivalent of $ 8.8 billion. Walmart has said it will recognize a $ 2.5 billion loss after the tax. And on Nov. 6, Walmart said it would sell its retail operations in Argentina in a deal that would result in a non-cash loss after a tax of about $ 1 billion.

Walmart executives said in early 2018 that the retail giant would be fighting slow growth and international operations in favor of higher growth or e-commerce opportunities. Since then, it has gradually resumed international operations, including buying an Indian e-commerce startup Flipkart for $ 16 billion and investing in e-commerce operations in Canada and Mexico.

A spokesperson for the Covid-19 pandemic as a result of the rapid acquisition of purchases around the world was also important when Walmart decided to sell its Japanese operations, a company spokesman said Monday. Rakuten already has an e-commerce infrastructure and can scale quickly to meet customer expectations, a spokesman said. “Such a partnership makes sense for the business,” he explains.

More information The Wall Street Journal

The pandemic has also helped in grocery stores and Walmart may have made it easier to find buyers. “The wind has been strong because more people stay home and eat less outside,” said EiK Yatagawa, a member of KKR. “The amount of purchases per visit has also increased as they are trying to get out on the streets less often.”

Two years ago, Walmart sold them in another deal that lost most of its Brazilian operations. The trader maintains a strong physical presence in several places, including China, Mexico and Central America.

Walmart’s biggest bet abroad in recent years has been e-commerce: in 2018, it bought about 77% of the Indian startup Flipkart for $ 16 billion, the largest purchase to date.

Walmart’s method of gaining dominance in the U.S. – eliminating the inefficiency of the supply chain and getting the best price from suppliers – often did not return to foreign markets like Japan.

After first investing in Seiyun in 2002, Walmart eventually spent more than $ 2 billion to control 100% of what it loses in 2008. Seiyu then stopped reporting its results, but other large Japanese stores are selling basic necessities, suffering from food and household items. The income presented by the government of Walmart, a direct parent of Seiyu in Japan, has shown almost no net profit in recent years.

KKR’s Yatagawa said Rakuten’s stake in Japanese e-commerce companies competing with Inc. will help Seiyu mix online and offline shopping. And Seiyuk says he can make faster and more localized business decisions in private capital management than Walmart.

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