Struggling department store operator Sogo Inc. announced Monday that it will integrate its operations with Seibu Department Stores Ltd. on June 1 under a new holding company, Millennium Retailing Inc.

The move is expected to trigger further consolidation in an industry battered by declines in consumer spending and changing lifestyles.

The holding company will boast combined group sales in excess of 1 trillion yen, making it the second-largest department store chain after Takashimaya Co.

Sogo and Seibu will retain their respective brands under the new company.

"It is not the weak helping the weak to survive," Sogo President Shigeaki Wada, who is slated to head Millennium Retailing, told a news conference.

Shunichiro Uchimura, a former Seibu official and currently Sogo's director in charge of store operations, will become Sogo's president, while Fumiaki Osaki, also a former Seibu official and now a Sogo senior official, will take the helm at Seibu.

The two companies had a total of 32 stores across the nation as of February, but Seibu has announced that it will close four of its outlets as part of its own reconstruction.

Wada said he will exploit the strength of each brand -- Seibu's popularity with young shoppers and Sogo's middle-aged and elderly clientele -- to bolster the competitiveness of the chains.

The two department stores have already forged operational alliances and staff exchanges to weather their difficult situations.

Sogo, once the country's largest retailer, emerged from bankruptcy in January under the firm restructuring hand of Wada, a former president of Seibu with a reputation as a turnaround specialist.

Seibu Department Stores, which used to be a conglomerate with far-flung operations, is reconstructing its finances after it received a 230 billion yen bailout package from its lenders.