Wal-Mart Japan: throwing good money after bad.
Damn, what’s the Japanese kotowaza/proverb for, “Throwing good money after bad”?
Wal-Mart to up stake in Seiyu
TOKYO – Wal-Mart Stores Inc. will make struggling Japanese affiliate Seiyu Ltd. a subsidiary this year, lifting its stake to over 50 percent
…. to inject fresh capital into Seiyu to prevent it from falling into negative net worth.
It is now widely understood that Wal-Mart/Seiyu has screwed up in the Japanese market. According to the report in Business Week: Japan Isn’t Buying The Wal-Mart Idea their revenues have contiued to slip by 3.7%, to $9.8 billion and this decline seems to be accelerating, Business Week also remarked that Wal-Mart-Seiyu’s “sales tumbled by 5.7% in the second half, compared with a 3.5% drop in the first.” Wal-Mart Japan has got look at the realities of their Seiyu operations. Seiyu has big, dirty, wornout, old-line style department stores the sell everything from ashtrays to zebra-striped pajamas at so-so cheapish prices—that just ain’t gonna cut it in fussy, quality-crazy, Japanese customers. Sheesh.
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July 6th, 2005 at 6:58 pm
Give me a break! Carrefour screwed up, but only by leaving. Wal-Mart may have screwed up by being convinced (by Sumitomo) to buy a bankrupt company. OTOH, Wal-Mart has so far got Seiyu for peanuts in their terms. Yes, they need to continue to adjust, but if Wal-Mart pulled out of Japan today, Seiyu would be a viable firm with some of the best IT & logistics tech in the country. Wal-Mart won’t pull out just yet because it’d hurt their share price (and give Nikkei something else to bash on about…). If Japanese consumers are ‘quality crazy’ (rather than ‘easily duped’ with ‘this is good quality, pay the price’), why did people like Comme Ca & Uniqlo suddenly come good & stay good, and why are department stores dying? It’s all a myth. Japan is different, difficult, and has the worst supply chain cartels in the world (I know, I work in ‘em), and Wal-Mart might have been mad to come here in the first place, but if it pulls out now, the only people to lose out will be Japanese consumers.
September 27th, 2005 at 2:13 pm
Wal-Mart to buy Tommy Hilfiger —the street cred of both companies drop 1000% in one day!