Retailer Aeon Co. has bought a stake in department store operator Parco Co. as part of its plans to expand in Japan's urban areas and China.
Aeon said Tuesday it now holds 12.31 percent of Parco. The retailer said Parco's expertise in operating in urban areas will improve Aeon's shopping centers in Japan and help the company's expansion in China and other overseas markets.
Aeon, Japan's second-largest retailer and operator of the Jusco supermarket chain, said in October it is focusing on Tokyo and other urban areas where it expects the population to grow. The company, based in Chiba Prefecture, also plans to boost the proportion it spends on expanding in China and Southeast Asia.
"It's positive for Aeon, which wants to increase sales in metropolitan areas and it may be positive for Parco as well," said Naozumi Nishimura, an analyst at TIW.
Parco operates about 20 department stores focusing on fashion for the young in Japan's cities, including in Tokyo's Shibuya district and Nagoya, near the home of Toyota Motor Corp.
Aeon hasn't discussed its acquisition of Parco shares with Mori Trust Co. and Development Bank of Japan, the department store operator's partners, Aeon said. The retailer may make Parco its affiliated company, while keeping its stake at less than 20 percent, it said.
Kenichi Suenami, a spokesman at Aeon, said the company bought the stake in Parco from a U.S. fund and the stock market. He declined to name the fund and say how much the company paid for the stake.
