The Seibu Ikebukuro main store is closed on Aug. 31 as about 1,000 employees walked out in the first strike at a major department store in more than 60 years. (Video by Masahiko Endo)

Photo/Illutration The Seibu Ikebukuro main store is closed on Aug. 31 due to a strike. (Yuki Shibata)

Seven & i Holdings Co. announced Aug. 31 that it will sell Sogo-Seibu Co. to a U.S. investment fund on Sept. 1 just as the subsidiary’s flagship department store in Tokyo was being shut down by a rare strike by protesting employees. 

About 1,000 employees walked off the job at the Seibu Ikebukuro main store in a bid to put the sale on hold in the first strike at a major department store in Japan since 1962. 

However, Seven & i, Sogo-Seibu’s parent company, decided to proceed with the sale to Fortress Investment Group at an extraordinary board meeting on Aug. 31. 

Fortress Investment will acquire 100 percent of shares in Sogo-Seibu for an estimated 220 billion yen ($1.5 billion). 

Seven & i decided to waive about 91.6 billion yen out of the company’s loans worth 165.9 billion to the financially struggling Sogo-Seibu. 

A labor union of Sogo-Seibu, which organizes about 4,000 employees, handed in a strike notice on Aug. 28 out of concerns that the company will be unable to continue as a department store operator and that jobs will not be protected after the sale.

“Until the moment seals are put on the share transfer contract, we will convey our thoughts in a single loud voice without quitting,” Yasuhiro Teraoka, chairman of the labor union, said after marching in a protest with about 300 union members and supporters around the Seibu Ikebukuro main store.

He later told reporters that he was not surprised by Seven & i’s board decision but that it was regrettable.

The Seibu Ikebukuro main store in Tokyo’s Toshima Ward will be closed throughout the day.

“The store is like a symbol of the Ikebukuro district,” said a 75-year-old woman who was passing by. “As a consumer, I cannot say anything about the strike because both sides must have a case. But I hope negotiations will move in the right direction and lead to a settlement.”

Seven & i concluded a contract with Fortress Investment in November and originally planned to sell the subsidiary in February.

But the sale has been postponed because the labor union, landowners and other parties expressed concerns about plans to have Yodobashi Holdings Co. open a large camera and consumer electronics store on the lower floors of the Seibu Ikebukuro main store.

In front of the department store on Aug. 31, union members held a banner calling for the department store to be “protected” and handed out fliers saying that the union is protesting because that if the sale must proceed, it should do so more carefully.

About 30 people from 15 labor unions, such as those organizing workers in the convenience store industry, gathered in front of Seibu Ikebukuro to show solidarity.

The labor union has been demanding explanations from Seven & i about the prospects of department store operations and employment maintenance after the sale.

The union had told Seven & i that it would call off the strike if the company did not move forward with a board decision on the sale on Aug. 31 and demanded a reply by Aug. 29.

But Seven & i, which fears that a further delay in the sale would undermine Sogo-Seibu’s corporate value, did not change its plans.

The company said after receiving the strike notice that anxiety is spreading among Sogo-Seibu customers, business partners and employees nine months after the sale was announced.

“Adverse effects have emerged on business operations of the Seibu Ikebukuro main store and other department stores,” the company said.

“The earliest possible (sale) will contribute most to maintenance of employment and continuation of business.”

Labor unions at other major department store operators, which also face increasing competition from online retailers and shopping malls, have stood alongside Sogo-Seibu’s union.

Senior members of labor unions at Takashimaya Co., Isetan Mitsukoshi Holdings Ltd. and other companies attended Teraoka’s news conference on Aug. 28 in a show of support.

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