$356 mil; to axe
The owner of Ala Moana CenterBloomberg News
expects to sell Hawaii's largest
mall by the end of May
TOKYO -- Daiei Inc., Japan's largest supermarket operator and the owner of Ala Moana Center, said it lost about 42 billion yen ($356 million) in the fiscal year ended Feb. 28, forcing it to cut 3,000 jobs in three years, reduce pay, overhaul management and liquidate up to 40 subsidiaries.
The result is down from a profit equal to $10.2 million the year before and below its October profit forecast of $4.2 million yen.
Daiei said it expects to sell Ala Moana Center in Honolulu by the end of May, as one of a series of steps to deal with its debt burden of trillion yen (or about $8.5 billion). The company also owns four grocery and general merchandise stores on Oahu.
Daiei said it has four bidders for the 1.5 million-square-feet shopping center, Hawaii's largest. Daiei joined with Equitable Companies Inc. to buy Ala Moana for $282 million in 1982. In 1995 it bought out Equitable's 40 percent interest for $410 million.
The Japanese company also said today that it plans to halve the number of its board members and sell or liquidate up to 40 affiliates in three to four years, said President Tadasu Toba.
"Daiei still hasn't come up with a vision for how to improve its retail business," said Junichi Kanamori, analyst at Societe Generale Securities Ltd., who said he's not planning to change his "sell" rating on the stock. "Selling off assets won't necessarily lead to increased sales."
Kobe-based Daiei will close 20 unprofitable outlets within the current fiscal year, sell its stake in a bento lunch box chain and sell its shares in the Printemps department store in Tokyo's Ginza district.
It also will sell its shares in the Lawson chain of convenience stores to the public in 2000, and may sell hotels if it can find buyers, Toba said at a press conference.
Daiei, which has 346 stores in Japan, hopes to sell the Ala Moana shopping center for $800 million, the Nikkei Telecom news service reported earlier.
Executive Vice President Jun Nakauchi, son of founder Isao Nakauchi and at one time considered his father's heir-apparent, will resign, Nikkei also reported.
"Without the presence of the founding family in the top management, Daiei's restructuring effort is likely to take place more expediently," said Joya Konishi, a Schroders Japan Ltd. analyst.
The elder Nakauchi, who presided over the company's expansion into real estate and other businesses in the 1980s, now holds the largely ceremonial post of chairman after stepping down as president in January.
In Tokyo trading today, shares of the struggling retailer surged 22 yen, or 6 percent, to 380 yen on reports of the restructuring.
The company also plans to suspend shareholder dividends for the year ended last month, the Asahi and Kyodo news services reported today.
The job cuts, to be carried out among 22,500 employees of the parent company, would consist of early retirement and more transfers to affiliates, Asahi said.
Star-Bulletin reporter Russ Lynch contributed to this report.