Wal-Mart exec to be CEO of Seiyu

Wal-Mart COO Ed Kolodzieski is to become Seiyu's first foreign chief executive, according to a report by the FT. The senior executive in charge of Wal-Mart's international operations will become president and chief executive of the loss-making Japanese subsidiary from 15 December this year, in an effort to reinforce managerial control at Seiyu. In his new role, Kolodzieski will work together with Seiyu chairman, Noriyuki Watanabe. In addition to Kolodzieski's appointment, the Seiyu boards will be subject to a reshuffle in December, when Wal-Mart executives will make up the majority of the board with six of the 11 seats.

Wal-Mart made the announcement as it finalized a rescue package for Seiyu. It will inject Y67.5 billion (£325 million) into the Japanese retailer, thereby increasing its stake to 54 percent and making Seiyu a wholly-owned subsidiary. The Mizuho Corporate Bank will also inject Y47.5 million by purchasing preferred shares. On Wednesday Seiyu almost doubled its net loss forecast for this year, underscoring the difficulties that Wal-Mart will face in Japan . This will be Seiyu's fourth consecutive loss-making year. The two companies have agreed on a five-year restructuring programme, which will hopefully return the Japanese retailer to profitability.

Japan , the world's second biggest retail market, has proved tricky not only for Wal-Mart but also for France 's supermarket chain Carrefour, and British health and beauty retailer, Boots, which withdrew its operations from the country. Wal-Mart is trying to encourage Japanese shoppers to buy more than groceries at Seiyu. "We want customers to see Seiyu beyond just the food assortment and see our general merchandise and apparel," Jeff McAllister, who is in charge of Wal-Mart's Japan operations, told the FT. "This means continually improving our general merchandise assortment." Currently, food accounts for almost 60 percent of total sales, but has a far lower profit margin than general merchandise and apparel.