Strike shuts to Japan store after Fortress buy

Strike shuts to Japan store after Fortress buy

Published on: Saturday, September 02, 2023

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Members of the Sogo and Seibu Labor Union (L) hand out flyers outside the Seibu Ikebukuro main store, during a strike in Tokyo.

TOKYO: The shutters were down on one of Japan’s best-known department stores this week in the sector’s first strike for six decades, sparked by fears that its mooted new US owner will slash jobs.
The Seibu in Tokyo’s Ikebukuro district attracts around 70 million visitors a year to its 14 floors, where its ultra-polite staff sell everything from sushi to Armani seven days a week.

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Sitting atop one of the world’s busiest railway stations, it is the jewel in the crown in the Sogo and Seibu chain of 10 department stores owned by Seven & i Holdings around Japan.
However, the 83-year-old building in Ikebukuro needs renovation and because the chain has not made a profit for five years, Seven & i wants to sell it to US investment group Fortress.
Unions, fearing job cuts, called a one-day stoppage—the first by Japanese department store workers since 1962.
“At this point, the union is not convinced if the sale plan is based on business continuity and (that) the plan ensures keeping workers’ jobs,” union chief Yasuhiro Teraoka told reporters earlier this week.

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The stoppage is so rare that it has made national headlines, with Japanese television journalists broadcasting live outside while a news helicopter filmed overhead.
“I’m so interested so I took a two-hour train ride to see it. I think it will have a great impact nationally,” pensioner Susumu Aso, 68, told AFP.

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“(A strike) is something that I have only seen in textbooks,” one young passerby told broadcaster NHK.
Japan’s department stores have struggled in recent years to adapt to 21st-century consumers’ shopping habits.
Michael Causton, co-founder of research firm JapanConsuming, said the number of department stores has tumbled from 311 in 1999 to 181.
“Away from the main conurbations, suburban and terminal shopping malls have taken over… as the main shopping destinations in most cities, leaving department stores and older shopping buildings with fewer and fewer customers, while local shopping streets are full of empty store fronts,” Causton said.
Strikes are rare in Japan, with only 33 recorded in the world’s third-largest economy in 2022, according to the labour ministry.
“Roughly 80 percent of labour unions say their relationship with the management is stable, so labour negotiations perhaps didn’t need strikes,” a ministry official told AFP.
The Sogo and Seibu strike “involves a change of a managing company and change of management policy that could threaten jobs, which is an issue that cannot be solved under a long-term, stable labour-management relationship”, Hiroyuki Minagawa, a labour law specialist and professor at Chiba University, told AFP.
“Similar cases of strikes may increase in Japan in the future as global corporate mergers and acquisitions become increasingly common globally,” he said.
Seven & i president Ryuichi Isaka bowed to television cameras as he apologised “for causing troubles to many customers and stakeholders”.
But the firm’s board still decided at a meeting to go ahead with the sale to Fortress, media reports said.
Activist investors are pushing Seven & i to maximise profitability and shareholder value by focusing on its 7-Eleven convenience stores and shedding less profitable businesses, Bloomberg News reported.
“As a citizen, I cannot accept the sale,” said a 74-year-old holding a poster in support of the strike but who did not want to give his name.
“Japanese should protest more like the French,” he told AFP.

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