A restructuring plan dubbed the "Seven & i 100 Day Plan" -- the first ever midterm business plan for Seven-Eleven convenience store chain parent Seven & i Holdings Co. -- revealed by company president Ryuichi Isaka has garnered criticism from market observers for failing to overhaul the company's troubled general merchandise or address the future prospects of its omnichannel sales strategy integrating online and brick-and-mortar stores.
Ninety percent of Seven & i's operating profits come from its convenience store business, while the group company's general merchandise store Ito Yokado and its two department stores, Sogo and Seibu, continue to dampen overall profits with their sagging clothing sales. Rebuilding these latter two businesses is of the utmost urgency, and while Seven & i Holdings agreed to sell three of its department stores to H2O Retailing Corp. in a capital and business tie-up, steps toward reform have only just begun.
According to the midterm plan, Seven & i will change a portion of their general merchandise stores, begun by the group's founder who still has significant influence, to food-only supermarkets in an effort to improve earnings. Company president Isaka, however, emphasized that the group would not be withdrawing from the clothing retail business.
"It's disappointing that Seven & i did not re-examine its general merchandise business and take steps such as withdrawing from the clothing business," said Masayuki Kubota, chief strategist at Rakuten Securities Inc.
The omnichannel approach, launched under the leadership of former Seven & i chairman Toshifumi Suzuki, has yet to take root. The company has implemented new services using smartphone apps, but there remain numerous problems, including the small number of products available online. Online businesses should be playing a leading role in the group company, but Isaka has not yet been able to show his unique colors in this area. Nissen Holdings Co., a mail-order clothing store that was made into a subsidiary of Seven & i as a core business of the group company's online division, is still struggling; a plan to rebuild it has yet to be revealed.
It was with the stepping down of former chairman Suzuki, who led the group for over 20 years, that Isaka has embarked on these changes. Observers have not pinned high hopes on the midterm plan, however, with an analyst at a domestic securities firm saying that "it's hard to say whether this will end up being effective reform that leads to the growth of the group company as a whole." A departure from the "Suzuki method" of business, in other words, has yet to be realized.