Fortune magazine this week has a major story about China as Wal-Mart’s new cash cow, but things are not so bright in the land of the rising sun. The chief executive of Wal-Mart’s Japan acquisition, Seiyu, quit this week while announcing that the company was looking at a loss for the year because of stumbling sales. Masao Kiuchi announced his resignation as chief executive of Seiyu, a retailer that Wal-Mart controls with a 42% stake. Seiyu said its forecast for the year ending December showed a loss of $66.5 million because of weak sales. Wal-Mart has taught Seiyu some of its fancy inventory tracking systems, and helped them open large supercenters, but the chain store is not competing as well as hoped against several indigenous retail chains. In a strategic move, Wal-Mart decided to keep the Seiyu stores with its existing brand, in part because some observers say the Japanese are not keen on Wal-Mart products, like apparel. For now, Wal-Mart invasion of Japan has been less than promised.
Wal-Mart has also not fared well in Germany, where the retailer has run into trouble with the national government over predatory pricing, employee dating policies, and other operational issues. German consumers, like the Japanese, have not set the stores on fire. All of which goes to prove that one success story does not fit all. For related stories, search by “Germany” and “Japan.”
