Landmark Japanese Department Stores Shuts Down Amidst First Strike in Over 60 Years - The Top Society

Landmark Japanese Department Stores Shuts Down Amidst First Strike in Over 60 Years


Employees at a prominent Tokyo department stores initiated a strike on Thursday after negotiations with management concerning the proposed sale of their company fell through. This marks a significant walkout, a rarity for the country in recent times.

Around 900 workers at the flagship Seibu store situated in the bustling Ikebukuro district are expressing their discontent over the sale of Sogo & Seibu, a subsidiary of retail behemoth Seven & i, to U.S. investment firm Fortress Investment Group. They were observed marching along the streets adjacent to the primary Seibu department store in Tokyo, carrying signs and distributing pamphlets, while the store’s shutters remained closed.

Department Stores

Their main demands include assurances of job security and business continuity. They are concerned about the rumored plans for discount electronics retailer Yodobashi Holdings to take control of approximately half of the store.

Critics, including officials in Ikebukuro, contend that such a transition, which would replace numerous distinct boutiques within the store, could diminish the store’s prestige.

The deal is set to conclude on Friday, according to Seven & i. The company noted that it managed to lower the sale value of Sogo & Seibu by 30 billion yen ($205 million) from the initially agreed-upon 250 billion yen, following its request for a concession from Fortress to give “maximum consideration of Sogo & Seibu’s business continuation and continuation of employment.”

Department Stores

As part of the agreement, Seven & i will also forgive a substantial debt of 91.6 billion yen, equivalent to over half of the funds it had extended to its subsidiary.

Strikes are an exceptionally infrequent occurrence in Japan, where discussions surrounding wages and working conditions are generally resolved harmoniously.

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This single-day strike, the first within a significant Japanese department store in 61 years, has emerged after extended discussions between Sogo & Seibu’s administration and the labor union. This development coincides with a scarcity of available labor in Japan.

The announcement of the Seibu deal in November initially led to its postponement due to the opposition it faced.

Seven & i issued an apology for the strike and affirmed that its subsidiary would persist in engaging in discussions with the union. Meanwhile, the rest of the Seibu and Sogo department stores were operating normally.

“We deeply apologize to all stakeholders including customers, local people, business partners and employees for the worries and inconvenience caused by the strike conducted by the Sogo & Seibu Labor Union today. Sogo & Seibu will continue collective bargaining and discussions with the Sogo & Seibu Labor Union, and the Company will also continue to provide support and cooperate to an appropriate extent on such discussions,” Seven & i Holdings said in a statement.

The Seibu & Sogo retailers collectively encompass ten outlets across the nation. While the decline of department stores has affected Japan later compared to countries like the U.S., their influence has been diminishing with the rise of online shopping.

Under its umbrella, Seven & i Holdings also oversees the 7-11 convenience store chain, along with Ito-Yokado, a relatively popular grocery chain, and Loft, a retailer specializing in stationery and household trinkets.

The company expressed its intention to capitalize on its strengths in convenience stores and food retail to reshape its business strategy.

Founded in 1998 and headquartered in New York, Fortress Investment Group LLC manages around $44.7 billion in assets.

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