FamilyMart UNY has released a statement today to confirm a deeper partnership with Don Quijote in Japan.
Details of the deal
FamilyMart UNY will acquire 20.17% stake in Don Quijote in exchange of its 60% stake in UNY hypermarkets. This will mean Don Quijote will wholly own and operate UNY, after acquiring 40% stake of the business last year. Last month, we outlined the full details on what to expect post-acquisition.
Structure to be reviewed...
The companies have decided today to commence the Tender Offer from 7 November 2018. After implementation of the Transfer and the Tender Offer, the retailer we consider reviewing the holding company structure, reorganising the Group and changing the company name. This will be in preparation for the annual shareholders meeting held in May next year. Further details will be announced in due course.
Market dynamics driving reinvention
Trading in Japan continues to be a challenge. With a falling number of customers visiting stores, consumption and market size close to declining, the market is becoming more and more competitive.
Retailers are looking for ways to respond to the country's labour shortages, but as drugstores continue to move into food and grocery sales and ecommerce expansion grows further, shoppers are increasingly more selective in how and where they shop. This has played a significant role in influencing FamilyMart and Don Quijote's decision to partner, allowing the two companies to explore ways to maximise their own strengths.
Better and more efficient stores
In an official statement today, FamilyMart UNY outlines the background and reasoning behind the decision, "the retail business requires creation of attractive stores, diversification of sales channels, more superior product development and procurement, and competitive price setting, as well as more efficient management, such as making store operation efficient and streamlining sales channels."