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Japan Department Store Braces for Rare Strike As U.S. Buyout Nears

TOKYO — A union representing department store workers in Japan plans to tell management on Monday it is ready to strike if talks on job protections break down.

The warning is aimed at Sogo & Seibu, whose parent Seven & i Holdings has agreed to sell it to U.S.-based investment fund Fortress Investment Group.

Negotiations between labor and management are set for Monday and are scheduled to continue after the union issues its notice. A strike could come as early as Thursday.

If workers walk out, it would be the first strike at a department store in Japan in at least 60 years.

Labor leaders were still weighing options for the possible action, including what stores would be affected. The flagship Seibu store in Tokyo’s Ikebukuro district was being considered.

Seven & i, which is also the parent of 7-Eleven, agreed last November to sell Sogo & Seibu to Fortress as part of an overhaul of the retail group.

Fortress has a partnership with Japanese electronics retailer Yodobashi Holdings. A proposal was floated for Yodobashi to put retail space in the Ikebukuro location and other Sogo & Seibu stores.

Labor and management have butted heads over floor space arrangements and other implications of the deal.

A former Sogo & Seibu employee and Seven & i shareholder filed a lawsuit earlier this year seeking to stop the sale. These headwinds have delayed completion of the transaction twice.

Union members voted on July 25 to authorize a strike. The union has called on Seven & i to disclose information on business and employment plans for after the sale, as well as to hold talks with labor representatives.

Meanwhile, Seven & i is moving ahead with steps to close the sale. At an extraordinary meeting of Sogo & Seibu shareholders last Thursday, three nominees who also hold posts at Seven & i were appointed to the department store operator’s board, giving Seven & i majority representation.

Seven & i is set to hold an special board meeting this Thursday. A proposal has been floated to complete the sale the following day, according to people familiar with the matter.

Source : Nikkei Asia