Aeon to sell stake in Talbots, sees China as key source of growth+

TOKYO, Dec. 9 Kyodo -
Japanese retailer Aeon Co. said Wednesday it will sell its entire stake in U.S.
clothing affiliate Talbots Inc. to improve its sluggish business performance by
relinquishing the money-losing U.S. unit and shifting its focus to operations
in Asia, particularly China, where growth is expected.

Aeon, which owns a 54 percent stake in Talbots, will liquidate its capital
alliance with the U.S. retailer soon, probably next February, by selling the
entire stake to a company to be created by three U.S. entities including
Talbots, Aeon officials said.
Masaaki Toyoshima, Aeon's chief financial officer, said at a news conference
that North America is no longer a ''strategic area'' and that the company
cannot afford to use its human and financial resources for that area.
''From now on, we will concentrate our management resources on Japan, China and
Asia,'' Toyoshima said, calling it ''efficient'' to focus its attention on the
Asian region.
His remarks underscore the company's withdrawal from operations in North
America and its policy shift to business in high-growth markets in Asia.
Aeon said Talbots will also repay debts owed to the Japanese company worth $265
million, or about 20 billion yen.
Aeon, which acquired Talbots in 1988, reported its first red ink in seven years
for the 2008 business year that ended in February due to shrinking consumer
spending.
Talbots, which is listed on the New York Stock Exchange, operates about 1,000
stores in the United States and Canada.
Aeon's sale of Talbot shares comes against the backdrop of major Japanese
retailers accelerating their moves to open stores in China amid a shrinking
domestic market as they face head-on competition from U.S. and European firms
that are also making forays into the Chinese market, industry analysts said.
Aeon has so far opened 31 stores, including general merchandise stores, in
China, and is set to open a shopping center in Tianjin in the fall of 2010,
following one that was opened in Beijing last year. It is also in the final
stages of negotiations to enter the Vietnamese market.
Meanwhile, rival supermarket store chain Ito-Yokado Co., a Seven & I Holdings
Co. unit, is set to open four more stores in two to three years in China, where
it has already run 13 outlets.
Supermarket chain operator Uny Co., which announced a capital tie-up with
Itochu Corp. in October, has also said it is looking to advance into China with
the help of the trading house.
==Kyodo
2009-12-09 22:20:41