TOKYO -- Seven & i Holdings, which owns supermarket operator Ito Yokado and the 7-Eleven convenience store chain, in February closed out its seventh straight year of record operating profit. In the midst of this long winning streak, a member of the company's founding family is quietly raising his profile, both internally and in the media.
At a briefing earlier this month in Tokyo, Junro Ito, who serves on the board of the holding company, announced that Seven & i has agreed to a tie-up offer from supermarket chain Izumi. Ito was the first to speak, even before President Ryuichi Isaka. Unlike previous briefings, Ito remained with reporters afterward, smiling and answering questions.
Izumi, based in Hiroshima, has a strong sales network in Japan's western Chugoku region and the island of Shikoku. The company operates around 200 You Me Town supermarkets. It is a good fit for Seven & i, which has only one Ito Yokado store in Chugoku, following the closure of an outlet in Okayama Prefecture last year. Rising logistics costs were becoming a burden for its small operation there.
Through the alliance, Izumi will oversee the remaining Ito Yokado outlet operating on its turf. Ito, who is also on the board of directors at Ito Yokado, was deeply involved in the deal. "It would not have happened under Chairman [Toshifumi] Suzuki," said a company executive.
According to a person at Izumi familiar with the matter, the tie-up offer was a return favor from Yoshimasa Yamanishi, the 95-year-old founder and chairman of Izumi, to Masatoshi Ito, 93, who founded Ito Yokado and is now honorary chairman of Seven & i Holdings.
By the 1970s, Ito Yokado had built a successful supermarket chain and a number of prominent people in retailing, including Yamanishi, sought Ito's advice. And when a member of Yamanishi's family fell seriously ill more than 10 years ago, Ito introduced him to a renowned hospital in Tokyo.
Junro Ito, Masatoshi's second son, has raised high hopes among Seven & i insiders. Isaka, the holding company's president, took over from then-Chairman and CEO Toshifumi Suzuki two years ago and began pushing for consolidation of the company's retail business.
But without Suzuki's strong presence, things got off to a rough start. Potential buyers of the company's assets and the banks needed to close the deals did not know who was in charge. As Junro gradually asserted himself, talks speeded up and the company's negotiating partners began feeling more at ease.
Junro studied management in the U.S. under the famous Peter Drucker. He later joined the family business, gaining extensive experience in operations at 7-Eleven Japan. Suzuki said he gave him more opportunities than other young employees, partly out of respect to the founding family.
Junro had to bide his time when, more than 10 years ago, Suzuki's son Yasuhiro joined the group to head its online retailing business.
Junro, as a director at the holding company, was tasked with overseeing the group's corporate social responsibility activities in 2009 and was not involved in marketing operations for a while. Instead, he would visit stores frequently to monitor CSR efforts and receive input from staff.
Junro's luck turned about two years ago, when he was put in charge of administration and investor relations, which gave him more exposure to the public.
Ito Yokado is trying to re-establish its supermarket brand. Since the launch of Seven & i Holdings in 2005, Ito Yokado stores had mainly used the "7 & i" logo on the exterior of its stores instead the more familiar dove logo. Now the dove is making a comeback.
The retail group still has a number of obstacles to overcome, from enhancing its online operations to restructuring its department stores to revamping its supermarket business. Junro is expected to support Isaka in those efforts. Some insiders are hoping he will succeed Isaka one day.