Seiyu Ltd., a subsidiary of U.S. retail giant Wal-Mart, said Tuesday it posted a group net loss of ¥6.9 billion in the January-June period due to weak clothing sales and sluggish growth in tenant sales.

The loss narrowed from the ¥54 billion posted a year ago, but its net loss did not shrink as much as initially planned.

Seiyu's operating loss widened to ¥2.2 billion from a loss of ¥1.4 billion in the same period last year, while sales declined 1.4 percent to ¥461.6 billion.

"I am disappointed that we were unable to achieve our sales targets," Seiyu CEO Ed Kolodzieski said at a news conference.

In December 2005, Wal-Mart increased its stake in Seiyu from 42 percent to 53 percent and has since been struggling to rebuild the supermarket chain. Losses have shrunk since then, but Seiyu has yet to return to a net profit.

Seiyu also revised its forecast downward for the full year through December. It expects to post a net loss of ¥5.9 billion, down from its February forecast of ¥800 million in profit.

It now expects to post sales of ¥963 billion, a downward revision from ¥992.1 billion.

Seiyu's same-store sales for the first half dropped 1.1 percent. The supermarket chain said it expects the figure to rise to 0.2 percent in the full year to December.

Seiyu's balance sheet worsened in the first half as total assets shrank ¥10.9 billion to ¥537 billion.