Seven & i Holdings, the Japanese retail giant, is undergoing a major restructuring to fend off a $47 billion takeover bid from Canadian company Alimentation Couche-Tard, which owns Circle K. The plan involves divesting non-core units, including its supermarket division, and refocusing on its iconic 7-Eleven stores. The company aims to create a new holding entity, York Holdings, for its underperforming businesses, while renaming itself 7-Eleven Corp to emphasize its streamlined focus.
A key part of the strategy is testing the “SIP” mini-supermarket format in Japan, which could create a new growth avenue. However, competition from rivals like Aeon, along with concerns from franchise owners, adds pressure. Overseas, 7-Eleven has struggled with declining profits, and the company recently slashed its full-year profit forecast by 25%, citing challenges in cutting costs quickly enough.
Despite these hurdles, Seven & i aims to improve profitability in its U.S. operations by closing underperforming stores and expanding fresh food offerings. Analysts suggest it will take at least five years to see significant gains from these initiatives. Investors, meanwhile, are keen to see quicker results.