The incoming head of Japan’s Seven & i (3382.T) said he is keen for his predecessor Toshifumi Suzuki, who resigned last month after a power struggle, to become an adviser to the $90 billion retail conglomerate – an olive branch that could help mend a divided board.
The gesture by Ryuichi Isaka, who is backed by U.S. activist investor Daniel Loeb, comes after Suzuki failed to oust Isaka in April in what was seen as a rare victory for corporate governance in Japan as the board refused to rubber-stamp the CEO’s decision.
It underscores the delicate balancing act Isaka, 58, must undertake as he seeks to push through a planned restructuring and win over the company’s board members, many of whom still revere Suzuki, a legendary figure in Japan’s retail industry.
“I would like him to stay as adviser,” Isaka said in an interview, adding that Suzuki’s title would be decided by Seven & i’s annual shareholders’ meeting on May 26.
It is not known if Suzuki, 83, is willing to be appointed as a Seven & i adviser. He could not be reached for comment.
Suzuki quit in a surprise move after narrowly failing to garner enough board votes to remove Isaka as the head of Seven & i’s profitable convenience store unit Seven-Eleven Japan.
Isaka, a veteran executive at Seven-Eleven Japan, has been credited with driving the convenience store chain’s growth but Suzuki contended that Isaka had not lived up to expectations.
The parent company then named Isaka as president to succeed Suzuki. New management will take over after the shareholders’ meeting.
Some analysts, though, have questioned any potential advisory role for Suzuki. In a report last month, Deutsche Bank said an advisory role or honorary position “may raise investor concern about the transition to the next generation of management”.
Isaka played down such concerns. “We will be able to consult him when we need to seek advice but at the end of the day his position is just an advisory one,” he said.
Loeb and others had demanded a drastic restructuring of the group’s Ito-Yokado supermarket chain due to the division’s mounting losses.
Isaka said Seven & i now plans a store-by-store review of the supermarkets to see whether they need to be scrapped or converted into grocery stores and intends to announce a new business plan for the whole company when half-year results are disclosed in October.
The company has said it will close 20 Ito-Yokado stores this business year.