TOKYO: Japanese retail giant Seven & i Holdings Co. has decided to sell department store unit Sogo & Seibu Co. to US fund Fortress Investment Group LLC for over 200 billion yen, sources said Friday.

Seven & i is expected to announce the decision, made at an extraordinary board meeting Friday morning, later in the day.

Fortress is working with electronics retailer Yodobashi Holdings. It has proposed that Yodobashi open outlets in Sogo & Seibu department stores, including the Seibu Ikebukuro store in Tokyo and the Sogo store in Chiba Prefecture, east of Tokyo, the sources said.

Seven & i has been under pressure from an overseas fund that is a major shareholder to shed operations other than its cash-cow convenience store business.

Earlier this year, Seven & i started selecting the buyer of the department store unit, aiming to finish the selection by spring. But the selection was delayed due to protracted negotiations over the terms of the deal.

In 2006, Seven & i acquired department store operator Millennium Retailing Inc. and remade it into Sogo & Seibu in 2009. But Seven & i has failed to generate enough synergy effects between the department store unit and other group companies.

Seven & i now aims to focus on its convenience store business by selling the department store unit, which logged the third straight annual net loss in the year ended in February this year.

The next focus is the fate of 10 Sogo and Seibu stores across the country with a total of some 4,500 jobs.

JIJI Press