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Labor crunch in Japan costs Seven-Eleven president his job

Retail giant names new leader to quell franchise revolt over 24-hour policy

Seven-Eleven Japan is testing shorter hours at some stores in response to complaints from franchise owners. (Photo by Masayuki Terazawa)

TOKYO -- The company behind Japan's 7-Eleven convenience store chain is reshuffling management as its longtime policy of requiring stores to stay open 24 hours faces mounting discontent among short-staffed franchisees.

Seven-Eleven Japan is set to appoint Vice President Fumihiko Nagamatsu as president in the first leadership change since 2016, when the sudden resignation of Toshifumi Suzuki as chairman of parent company Seven & i Holdings forced a shake-up. Current President Kazuki Furuya will serve as chairman of the operating company.

The hope is that Nagamatsu's background in human resources will help him more effectively steer an organization that is still reeling from the departure of its longtime chief. The loss of Suzuki's charismatic leadership, on top of a chronic labor shortage threatening the business model that powered the chain's growth for more than four decades, has proven a difficult combination to handle.

Franchisees have rebelled without Suzuki keeping them in check. In February, one store outside Osaka shortened its hours in violation of its franchise agreement. Some franchise owners supported the move and demanded the company re-examine its 24-hour policy.

Seven-Eleven responded by implementing shorter hours on a trial basis at 10 directly run stores. It also distributed a statement in Furuya's name to every franchise owner, saying 24-hour operation will be maintained in principle but hinted at flexibility.

The company "will not make across-the-board judgments," the statement said.

Seven & i President Ryuichi Isaka has tried to break with Suzuki's style, adopting a more collective leadership structure and putting more emphasis on dialogue with his management team and with stores. But communication within Seven-Eleven, and between the operating and holding companies, has not always been smooth. Isaka, also a director at Seven-Eleven, has said he was concerned that franchisee problems were not reaching management quickly.

The company is pinning its hopes on Nagamatsu to tackle communication issues despite a lack of experience. He was promoted to vice president just last month, but reportedly played a central role in distributing the statement on the 24-hour policy.

His appointment is expected to be approved by the board as early as Thursday and take effect next week.

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