Aeon Co. said Wednesday it will divest its stake in U.S. clothing chain Talbots Inc.
The retailer will focus on Japan, China and Southeast Asia, Chief Financial Officer Masaaki Toyoshima said. Aeon's equity in Talbots will be retired after the subsidiary repays all of its $491 million in debt, the U.S. company said.
"Talbots has been weighing on Aeon's earnings for a long time," Shigeo Kikuchi, an equity manager at Takagi Securities Co., said. "The U.S. is experiencing a slump in consumption so it's better to split from Talbots than to try to make it profitable."
Aeon, Japan's largest supermarket operator, acquired Talbots in 1988. Aeon USA Inc., a unit of Aeon, held 54 percent of Talbots' outstanding shares as of April 2.
After five straight quarters of losses, Talbots swung to a profit of $14.6 million in the period ended October.
