Japanese retail group Aeon has announced that it is to switch to a holding company structure with the aim of strengthening management control of its extended business interests.
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Under the reorganisation, Aeon will split itself into a holding company and a supermarket operator by the end of the fiscal year to February 2009.
“The purpose of the holding company is to help operation of our group companies,” a company spokesperson was quoted as saying. Aeon added that it plans to keep group companies such as Maxvalu and Aeon Mall listed after the restructuring.
The company, which is Japan’s second largest retailer, now has annual revenues JPY4.82 trillion (US$44.8bn), but faces an increasingly tough retail environment, with rising supplier prices and a public falling-out with its partner, CFS Corp., over the latter’s takeover by Ain Pharmaciez Inc.
CFS, a drugstore operator, has approved the US$120m takeover by Ain Pharmaciez but Aeon, which owns a 15% stake in CFS, has opposed the move, saying it would negatively affect shareholder value.
Meanwhile, rising commodity prices have forced many of Aeon’s suppliers in the food and household goods sectors to raise prices.
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