1. A one-day walkout by a labor union of Sogo-Seibu Co. did not ultimately prevent the parent company from selling the department store operator. However, an expert said the rare labor action, the first such strike at a major department store in more than 60 years, showed the risk of corporate restructuring without employee input.
2. “Some may criticize and say that nothing will be gained by going on strike, but is a society in which labor unions simply accept the situation desirable?” said Wakana Shuto, a professor of labor-management relations at Rikkyo University, who is familiar with labor-management relations in department stores.
3. Seven & i Holdings Co. on Aug. 31 decided to sell subsidiary Sogo-Seibu to Fortress Investment Group, a U.S. investment fund, on Sept. 1. The Sogo-Seibu labor union delivered a strike notice in an attempt to put the Seven & i’s Aug. 31 decision on hold, but negotiations with the parent company broke down and the sale proceeded.
・Should workers have a say in how a company operates and its business decisions?
・Should workers go on strike to prevent company restructuring and losing jobs?
4. “During corporate restructuring, the union showed the management side the risks of not disclosing enough information to the labor side and not adequately considering the worker’s voices,” Shuto said. “In that sense, it may be beneficial for all workers.”
5. Even in the department store industry, which has seen a string of store closures mainly in rural areas, it is rare for disputes over business restructuring to escalate into a walkout. With this strike, the Sogo-Seibu labor union showed its willingness to battle management to the fullest. Negotiations are expected to continue with management side that includes the new parent company, demanding continuation of business and maintenance of employment.
6. Seven & i also decided to waive 91.6 billion yen ($630 million) of the company’s loans worth 165.9 billion yen to the financially struggling Sogo-Seibu. Fortress Investment, which will become the 100 percent parent company, aims to restructure Sogo-Seibu by repaying the company’s interest-bearing debt of around 300 billion yen. It will sell the site of the Seibu Ikebukuro main store to Yodobashi Holdings Co. at a reduced price of 220 billion yen.
What do you think about the future of the department store business? Given the popularity of online shopping.
7. Fortress Investment announced on Aug. 31 that it will invest more than 20 billion yen in multiple stores, including the Seibu Ikebukuro main store, in cooperation with Yodobashi to undertake renovations. “We will support Sogo-Seibu’s management team to maintain employment to the maximum extent,” Fortress Investment said.
8. All 10 Sogo-Seibu stores nationwide are expected to be maintained for the time being. However, with Yodobashi opening a large camera and consumer electronics store inside the Ikebukuro location, the department store side will be unable to avoid downsizing, which will inevitably affect employment.
9. The labor union will continue to demand employment retention from Fortress Investment, but a steep road lies ahead.
