Wal-Mart has been doing very poorly in Japan ("having lost $105 million in 2004 and $152 million in 2005, [Wal-Mart] expects losses of $468 million during 2006") and there has been some speculation that that country might be the next cut. But Business Week reports that Wal-Mart may be looking to buy their way to prosperity.
... for all the backtracking elsewhere, Wal-Mart doesn't appear ready to give up on Japan just yet. On Sept. 4, Kyodo News, a Japanese wire service, reported that Wal-Mart and market leader Aeon have submitted proposals to acquire a stake in Daiei from trading house Marubeni, the largest shareholder in the once mighty retailer.BW suggests that Wal-Mart may quit Japan if they are unsuccessful in this bid: "But if Wal-Mart fails again to get its hands on Daiei, some fear it will bolt from Japan as it has from other countries." For the contrary view, they quote a local analyst:
Wal-Mart declines to comment on the report, but the impact of a deal with Daiei shouldn't be underestimated. Its outcome could well determine the success or failure of Wal-Mart's experiment in Japan, the world's second largest retail market after the U.S.
So does that mean Wal-Mart should cut and run if Daiei slips its grasp? Not necessarily, says Yoshihiro Tamehiro, director of the Distribution Economics Institute of Japan in Tokyo. "Wal-Mart is desperately looking for M&A opportunities in Japan. If they don't get Daiei, they should have other plans in place." If they don't, the Seiyu gambit could turn out to be another messy and expensive overseas quagmire for the king of U.S. retailing.Meanwhile, in Australia, the latest Coles Myer rumor is that Wal-Mart is interested in buying.
Australian retailer Coles Myer Ltd. Thursday declined to comment on a report that U.S. retail giant Wal-Mart Stores Inc. was considering a bid for the company. "We don't comment on speculation," a spokesman for the Melbourne-based company said.
The Crikey corporate gossip newsletter earlier Thursday quoted unnamed sources saying Wal-Mart directors were in Melbourne along with advisers from McKinsey and in the advanced stages of a bid, which could lead to Coles Myer being carved up.
The report said the proposal would lead to Wal-Mart buying the Coles grocery business, Kmart, Vintage Cellars and Liquorland, while Melbourne businessman Solomon Lew would buy Target. The Officeworks office supplies and furniture business would be sold to the highest bidder, the report said.