Wal-Mart?s Seiyu Gets Chilled by Summer

Seiyu Ltd., the Japanese subsidiary of Wal-Mart Stores Inc., said in October that it will have a first-half net loss as slumping sales add to its struggle to integrate its systems with its Bentonville parent.r

Wal-Mart, the world’s largest company revenue-wise, owns 37.8 percent of Seiyu. The Japanese segment has has begun implementing Wal-Mart’s sophisticated computer-linked management supply system that allows suppliers to monitor product sales in stores.r

But the effects of the integration are unlikely to be seen for two years.r

“Seiyu, in a transitional period, is suffering from high costs and falling sales,” Masafumi Shoda, an analyst at Nomura Securities Co., said in a prepared release.r

“Its parent Wal-Mart and the market are aware Seiyu’s plight will continue for a while.” r

Cool weather in July and early August added to its problems, Seiyu said, sapping demand for cold drinks, summer clothes and air conditioners, and intensifying competition in a retail sector already struggling with overcapacity and sluggish consumer spending.r

Seiyu reported a group net loss of 8.43 billion yen or $77.35 million for the six months to August. That compared with a net loss of 22.39 billion yen a year earlier, when it took nearly 35 billion in special charges for a reorganisation of group companies and stock losses. r