Shareholders Officially Confirm Mr. Tsuneo Okubo as Seiyu CEO
TOKYO & BENTONVILLE, Ark., March 1, 2021 — KKR, Rakuten, Inc., (“Rakuten”) and Walmart Inc. (“Walmart”) today announced that KKR and Rakuten subsidiary, Rakuten DX Solution, have completed their previously announced share purchases in Seiyu GK (“Seiyu”) from Walmart.
With the completion of the transactions, KKR owns a 65% stake in Seiyu, and Rakuten DX Solution owns a 20% stake in the Company. Walmart retains a 15% stake in Seiyu. KKR is making its investment from its Asia private equity fund.
The new ownership structure enables Seiyu to take advantage of KKR, Rakuten and Walmart’s combined retail expertise and innovation, in addition to accelerating Seiyu’s digital transformation to become Japan’s leading omnichannel retailer.
KKR, Rakuten and Walmart are committed to supporting Seiyu’s growth and long-term strategy in Japan and look to build on Seiyu’s success as a local-value retailer of choice. In 2020, Seiyu achieved its highest sales and profitability levels of the last decade, with net sales growing by 5.6% to JPY785 billion1. This generated an EBITDA2 margin of nearly 5%. Over the past two consecutive fiscal years, Seiyu gained market share and improved profitability. Cumulatively over this period, Seiyu comparative-store sales grew 180 basis points faster than the market3 and EBITDA increased by nearly 40%. In addition, Rakuten Seiyu Netsuper, jointly operated by Seiyu and Rakuten, recorded a nearly 40% year-on-year increase in gross merchandise sales in the fourth quarter of 2020. With the significant increase in demand for online supermarkets in recent years, a dedicated fulfillment center began operations in Yokohama, Kanagawa Prefecture in January 2021, and a new fulfillment center is scheduled to open in Ibaraki, Osaka Prefecture, within the year to meet this growing demand.
Today, the shareholders additionally confirmed the appointment of Mr. Tsuneo Okubo as CEO of Seiyu to lead the company into its next phase of development and growth, effective immediately. Mr. Okubo’s decades-long career in Japan’s retail sector includes senior roles for national supermarket chains. He brings to Seiyu a strong track record of elevating corporate strategies and performance through digital innovation, enhancing the operations of physical stores and localizing businesses to meet the evolving needs of shoppers in communities across Japan.
Mr. Okubo said, “I am thrilled to be joining Seiyu at such an important moment in its history. Together with KKR, Rakuten and Walmart, we have a tremendous opportunity to build on Seiyu’s achievements and stature in the market to take its business to the next level of success. Looking ahead, we are excited to accelerate Seiyu’s digital transformation to better meet the evolving shopping needs of our customers while continuing to expand on strong in-store presence in communities across Japan. I want to thank my predecessor, Lionel Desclée, for his leadership, and I look forward to working with our talented team of associates to build on Seiyu’s progress to become Japan’s leading omnichannel retailer."
1 As of Fiscal Year 2020, ending December 31, 2020.
2 EBITDA = Earnings Before Interest, Tax, Depreciation and Amortization.
3 According to data compiled by the Japan Supermarket Association, National Supermarket Association of Japan and the All Japan Supermarket Association.
Established in 1963, Seiyu is a nationwide supermarket chain in Japan with more than 300 retail units. Through its supermarket and hypermarket formats and Rakuten Seiyu Netsuper delivery service, Seiyu offers customers a broad assortment including fresh food, general merchandise, and apparel products across Japan from Hokkaido to Kyushu. Offering Everyday Low Prices to our customers, Seiyu contributes to making their everyday life more convenient as a leading, innovative, local value retailer, now powered by KKR, Rakuten and Walmart.
KKR is a leading global investment firm that offers alternative asset management and capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life, and reinsurance products under the management of The Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at kkr.com and on Twitter @KKR_Co.
Rakuten, Inc. (TSE: 4755) is a global leader in internet services that empower individuals, communities, businesses, and society. Founded in Tokyo in 1997 as an online marketplace, Rakuten has expanded to offer services in e-commerce, fintech, digital content and communications to approximately 1.4 billion members around the world. The Rakuten Group has over 20,000 employees, and operations in 30 countries and regions. For more information visit global.rakuten.com/corp/.
About Rakuten DX Solution:
Rakuten DX Solution is a new Rakuten Group subsidiary established in January 2021 to support the digital transformation of brick-and-mortar retailers across Japan and to promote the merger of offline and online retail (OMO) in order to serve customers with a seamless and personalized retail experience.
Walmart Inc. (NYSE: WMT) helps people around the world save money and live better - anytime and anywhere - in retail stores, online, and through their mobile devices. Each week, approximately 220 million customers and members visit approximately 10,500 stores and clubs under 48 banners in 24 countries and eCommerce websites. With fiscal year 2021 revenue of $559 billion, Walmart employs over 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting corporate.walmart.com, on Facebook at facebook.com/walmart and on Twitter at twitter.com/walmart.