Seibu Department Stores Ltd. is considering closing down about five loss-making outlets in rural areas over the next three years, company sources said Thursday.
The move is part of preparations to integrate its business with the Sogo department store group, which collapsed in July 2000 and is restructuring under the guidance of Seibu. Seibu has not decided which stores it will close but will review all 25 of its nationwide outlets, the sources said.
The streamlining plan will follow the liquidation of Seiyo Corp., the group's failed real estate firm, which is scheduled to take place by the end of next month.
Because most of Seibu's outlying stores are in leased buildings, Seibu faces penalties of several billion yen if it decides to shut them down.
The Sogo group got off to a fresh start last February by launching a new company called Sogo Inc. Many of Sogo's new board members, including President Shigeaki Wada, are from Seibu.
Seibu and Sogo are preparing to integrate their business in fiscal 2004 and are considering such steps as merging their merchandise departments and jointly developing a new information system in spring.