Workers stage Japan’s first strike over department store sales in decades

TOKYO, Aug 31 (Reuters) – Workers at a major supermarket in Tokyo went on strike on Thursday as talks with management over a planned sale of their company broke down, the country’s first major walkout in decades.

About 900 workers at the flagship Seibu store in the busy district of Ikebukuro are protesting the sale of Sogo & Seibu, a unit of Japanese retailer Seven & i ( 3382.T ) to U.S. fund Fortress Investment Group.

They are looking for job and business continuity guarantees, unhappy with discount electronics retailer Yodobashi Holdings’ plans to take over half of the store.

Critics, including officials in Ikebukuro, argue that such a change would cheapen Seibu’s image by displacing many of the individual boutiques within the store.

The deal will close on Friday, Seven & Nan said, “after requesting Castle to consider Sogo & Seibu’s business continuity as much as possible, reducing the sales value of Sogo & Seibu by 30 billion yen ($205 million) from the originally agreed 250 billion yen. Continuity of work”.

Seven and I will write off 91.6 billion yen in debt, or more than half of what it owed its unit, as part of the deal.

In a statement, Fortress said it will work with Seven & i to support Sogo & Seibu’s management to maintain its workforce “as much as possible.” Sogo & Seibu plans to invest more than ¥20 billion with partner Yodobashi to renovate its stores.

Strikes are rare in Japan, where negotiations over wages and working conditions are usually amicably accepted. The one-day strike – the first at a major Japanese department store in 61 years – followed months of negotiations between Sogo & Seibu management and the labor union, amid a severe labor shortage in Japan.

On Thursday morning, Seibu workers demonstrated in front of the store in the summer heat, while members of various unions handed out flyers to show their support.

Seven & i apologized for the strike and said the subsidiary would continue to negotiate with the union. Other Seibu and Sogo supermarkets were open for business as usual.

“I regret that we were unable to reverse the decision, but it is also true that our business is struggling,” union president Yasuhiro Teroka told reporters after the sale was announced.

“It may have been our failure not to have raised our voices until now… but I believe that having so many people see and hear what we had to say made it a remarkable event.”

Warning after

The strike comes amid an increasingly tight labor market in Japan, where workers at major companies won the biggest pay hike in three decades in labor negotiations this spring. Those gains, however, have been eroded by inflation at a 41-year high, and wages have continued to fall in real terms.

Sogo & Seibu’s workers drew support from labor unions at rival supermarkets including Takashimaya and Isetan Mitsukoshi ( 3099.T ).

“I think many workers have gained some encouragement from this case,” said Rikyo University professor Wakana Shuto, who specializes in labor issues. “Given the industry’s difficulties, Sogo & Seibu’s conditions are not unique.”

The Seibu Ikebukuro store is Japan’s third-largest department store by sales, according to media reports, but owner Sogo & Seibu has been in the red for the past four years.

The walkout raises the threat of similar sanctions for foreign funds seeking to rehabilitate Japan Inc’s brands, said Stephen Givens, a Tokyo-based corporate lawyer.

“You can buy a Japanese company, as a foreigner, by brute force, and it’s not going to do you any good if the people who actually manage the Japanese company and the people who work in the Japanese company aren’t happy with the results,” he said. said.

“This is one of the cautionary points that all foreign acquirers should bear in mind.”

($1 = 145.9200 yen)

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