[Company analysis] Seven & I Holdings Co., Ltd. (セブン&アイ・ホールディングス)

「Seven & I Holdings Co., Ltd. (セブン&アイ・ホールディングス)」is a holding company which has Japan's largest convenience store chain「Seven-Eleven Japan Co., Ltd.(セブン-イレブン・ジャパン)」. In addition this comany also has general supermarket,「Ito-Yokado(イトーヨーカ堂)」,「Sogo & Seibu Co., Ltd(株式会社そごう・西武)」and「YORK BENIMARU CO., LTD.(ヨークベニマル)」. This company is included in "Fortune Global 500". The number of consolidated employees is approximately 25,846.

 

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Seven & I Holdings Co., Ltd.
Company name (Japanese)	セブン&アイ・ホールディングス
Date of establishment	1927
Headquarters location	〒102-8452 東京都千代田区二番町8番地8
Capital	50,000
Consolidated sales	6,791,215
Consolidated operating profit	411,596
Consolidated total assets	5,795,302
Consolidated capital	2,672,486
Capital adequacy ratio	46.1%
Consolidated number of employees	25,846

 

 

 

2. Summary and Features

 
In fact, the core company of「Seven & I Holdings」 is「Seven-Eleven Japan」which is in charge of the convenience store business and it accounts for 80% of the operating income of the entire group. Originally, the core company was 「Ito-Yokado」the general supermarket , but due to the overwhelming performance of its subsidiary,「Seven-Eleven Japan」, their position was taken. Then, the market capitalization of 「Seven Eleven Japan」eventually exceeded that of the holding company「Ito-Yokado」, so in order to stablize the situation,「Seven & i Holdings」was established and the business integration was implemented as of September 1, 2005.

Actually, this「Seven Eleven Japan」is a convenience store that originated in the United States. In the past,「Ito-Yokado」acquired a license from「Southland Ice Company」, which owned "Seven-Eleven" in the United States.「Ito-Yokado」initiated this "Seven-Eleven" business in Japan from November 1973, as a strategy to suppress the resistance of small and medium-sized retail stores in the region. And this was a turning point of their history.

At that time, the key to their success was localization. They did not entirely accept American style product lineup and commerce practices, but they localize all of them according to Japanese dietary habits. 「Seven Eleven Japan」started to sell rice balls and bento at convenience stores, introduced a POS system, and partnered with related companies to develop unique products. As a result, this「Seven-Eleven Japan」has become the largest convenience store chain in the world, not only in Japan.

This huge success of「Seven-Eleven Japan」let them even purchased the above「Southland Ice Company」which once had provided them a lience of "Seven Eleven", and made it a subsidiary. On January 31, 2006, this company eventually purchased「Millenium Retailing, Inc.(株式会社ミレニアムリテイリング)」 into a subsidiary. By this merger, they became able to handle not only convenience stores, supermarkets but also department stores. At the same time, this company became one of the largest giant comprehensive distribution companies in the world.

In convenience store industry, this company has very strong position. Actually, 94% of the operating income of the Group is generated by the convenience store business and the financial business. On the other hand, the performance of the supermarket business, which was the original core business, has recently declined.

As for the sales composition ratio of the past 10 years, there is a fairly interesting fact. Over the last 10 years, the proportion of overseas sales has continued to decline. Actually, sales in the United States have increased by 30% for the last 10 years, and other regions are also undergoing rapid growth of 3 to 4 times. But sales in Japan have increased rapidly even higher than oversea business! That is why the oversea sales rate has decreased.

 

 

 

3. Major Business

 

■ Convenience store business
They are developing a convenience store chain through「Seven-Eleven Japan」and operating a total of 19,166 stores.

■ Comprehensive supermarket business
They are implementing a comprehensive supermarket business through「Ito-Yokado」.

■ Department store business
It is a department store business through “SOGO / Seibu”, and they are aiming to differentiate itself from their competitors through their own brand development business, including the individual brand “Limited Edition(リミテッドエディション)”. 

■ Food supermarket business
To revitalize the region, they are also implementing a supermarket business targeting small trading areas.

■ Food service business
They are also implementing a food service business through「Seven & i Food Systems」.

■ Financial services
Through「Seven Bank, Ltd.,」, they have installed ATMs at various locations such as Seven-Eleven, Ito-Yokado, train stations, and airports to provide financial services. In addition, through「Seven Financial Service Co., Ltd.」, they are developing services related to electronic currency, credit cards and insurance leasing.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		5,835,689	6,037,815	6,791,215
Consolidated operating profit		364,573	391,657	411,596
Consolidated total assets		5,508,888	5,494,950	5,795,302
Consolidated net assets		2,475,806	2,575,342	2,672,486
Breakdown of sales	Convenience business (Japan)	899,836	927,205	954,090
	Convenience business (Oversea)	1,658,338	1,980,897	2,818,899
	Supermarket business	1,938,093	1,891,260	1,893,959
	Department store business	720,199	649,353	585,011
	Financial related business	164,432	166,664	177,334
	Specialty store business	447,210	414,287	353,967
	Others	7,577	8,146	7,918
	Adjustments	0	0	35