Japan's Seven & I shares surge on plan to cut 3,000 jobs, shut a thousand 7-Eleven stores

Japan's Seven & I shares surge on plan to cut 3,000 jobs, shut a thousand 7-Eleven stores

FILE PHOTO:  A shopper is seen behind a Seven & I Holdings' logo at a 7-Eleven convenience
FILE PHOTO: A shopper is seen behind a Seven & I Holdings' logo at a 7-Eleven convenience store in Tokyo, Japan, April 6, 2016. REUTERS/Yuya Shino/File Photo

TOKYO: Shares of Japan's Seven & I Holdings rose nearly 6 per cent on Friday (Oct 11) after the retail group said it will shut or relocate nearly 1,000 7-Eleven convenience stores and cut about 3,000 jobs as part of a group-wide restructuring.

The company said it will also lower franchise fees at its 7-Eleven convenience stores and offer owners more assistance to keep them open 24 hours, a move likely to hit margins.

The company has faced complaints by franchise owners, some of whom were forced to keep working amid massive snowstorms or in the wake of a family death, attracting nationwide attention and scrutiny from regulators.

It also announced on Thursday that it will accelerate closures of some Ito-Yokado supermarkets as well as poor-performing department stores under the Sogo and Seibu brands.

As a result, the company plans to cut around 3,000 jobs throughout the group over the next few years. It workforce totaled 144,628 employees as of end-February.

Seven & I Holdings reiterated its forecast of a rise 2per cent in annual operating profit to 420 billion yen (US$3.89 billion), putting it on track for a its ninth consecutive year of record earnings.

Shares of the company rose as much as 5.9 per cent in morning trade, their highest intraday gain in almost three years, to 4,409 yen, compared with a 0.8 per cent rise on the Nikkei 225 average.

Source: Reuters/jt

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