Struggling supermarket operator Seiyu Ltd. on Wednesday named Ed Kolodzieski, chief operating officer of Wal-Mart International, as its next CEO, underlining greater control of the company by the world's largest retailer.
The top management shakeup will take effect Dec. 15, when the firm will hold a shareholders' meeting to approve a fresh capital injection by Wal-Mart, a move that will officially make Seiyu the Japanese unit of the U.S.-based retail giant.
"Wal-Mart's intention to commit one of our top company executives demonstrates our commitment to making Seiyu the Japanese customer's first choice," Mike Duke, vice chairman of Wal-Mart International, said in a statement.
Duke is one of three new members who will be dispatched to the Seiyu board by Wal-Mart, which will hold six out of 11 seats after the change. Current Seiyu Chairman and CEO Noriyuki Watanabe will remain as chairman.
At a news conference, Watanabe stressed his company will benefit from closer ties with Wal-Mart and access to its global retail infrastructure.
However, it appears unlikely the new management team will be able to expect an upturn in the chain's performance anytime soon.
Also on Wednesday, Seiyu said its net loss for the full year to December is likely to be larger than originally thought. The retailer revised its forecast to a 13.5 billion yen net loss, noting sales campaigns and markdowns had hurt profit margins.