TOKYO: Japanese retailer Seven & i Holdings Co. said Friday that it has sold department store unit Sogo & Seibu Co. to US private equity firm Fortress Investment Group LLC for 85 million yen.

The sale allows Seven & i to shift its focus on reinforcing its mainstay convenience store operations and reconstructing its struggling Ito-Yokado Co. supermarket unit.

Seven & i cut its consolidated net profit projection for the year through February 2024 to 230 billion yen from a record 285 billion yen due to a special loss of about 133.1 billion yen over the sale of Sogo & Seibu.

Fortress aims to turn around Sogo & Seibu by opening outlets of Japanese electronics retailer Yodobashi Holdings Co. at some stores. Yodobashi plans to buy the land of Sogo & Seibu’s flagship Seibu Ikebukuro store in Tokyo for some 300 billion yen.

Jin Ryu, an executive at Fortress’ Japan unit, became a representative director at Sogo & Seibu Friday, people familiar with the matter said. Sogo & Seibu President Hiroto Taguchi lost the right to represent the company.

In November last year, Seven & i announced a plan to sell Sogo & Seibu to Fortress.

Seven & i’s board voted to approve the sale of Sogo & Seibu on Thursday, when Sogo & Seibu’s labor union staged a full-day strike at the Ikebukuro store, the first strike at any major Japanese department stores in 61 years.

JIJI Press