Bulletin: Seven&i Departing From Department Stores Would Boost Financial Momentum

TOKYO (S&P Global Ratings) Feb. 1, 2022--Financial recovery of Seven&i Holdings Co. Ltd. may gain momentum if the sale of its department store business goes ahead as reported. Media reports have stated the company is negotiating the sale of its Sogo and Seibu department store businesses. It plans to concentrate management resources on convenience stores in Japan and North America, reports said. We expect the credit metrics of Seven&i (A/Negative/--) will recover about one year earlier than our current assumptions if it sells Sogo and Seibu for more than ¥200 billion, as reported, and uses the proceeds to improve its financial profile. The company has tightened financial discipline to aid recovery of its finances, which weakened

...February 1, 2022 TOKYO (S&P Global Ratings) Feb. 1, 2022--Financial recovery of Seven & i Holdings Co. Ltd. may gain momentum if the sale of its department store business goes ahead as reported. Media reports have stated the company is negotiating the sale of its Sogo and Seibu department store businesses. It plans to concentrate management resources on convenience stores in Japan and North America, reports said. We expect the credit metrics of Seven & i (A/Negative/--) will recover about one year earlier than our current assumptions if it sells Sogo and Seibu for more than Ñ200 billion, as reported, and uses the proceeds to improve its financial profile. The company has tightened financial discipline to aid recovery of its finances, which weakened materially following the acquisition of Speedway LLC. Accordingly, we assume it will prioritize debt reduction in allocating cash flow from its convenience store business in Japan and abroad in the next one to two years. In addition, we estimate...

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