Finance & Business World

Wal-Mart Stores will buy the rest of Japanese chain Seiyu as the U.S. retail giant seeks the flexibility it says it needs to turn around the money-losing supermarket operator.

Seiyu, Japan’s fifth-biggest retailer by sales, said shareholders approved the move at a meeting earlier Tuesday. The vote allows Wal-Mart to buy the remaining 4% of Seiyu it doesn’t already own.

Since entering the Japanese market in 2002, Wal-Mart has been gradually raising its stake in Seiyu, which has about 400 stores nationwide. But Wal-Mart has also struggled to make money in Japan. Although mall-style shopping is increasingly popular here, for everyday food and other needs, shoppers tend to go to smaller neighborhood stores.

In February, Seiyu reported a net loss of $216 million for last year, underscoring the tough time Wal-Mart is having in returning the Japanese company to the black.

Weak sales of clothing and other seasonal goods led to a 0.9% fall in revenue to $9.82 billion for the year, down from about $9.92 billion a year earlier.

The poor performance suggests Wal-Mart’s "Everyday Low Price" strategy has backfired in Japan, where consumers tend to equate low prices with low quality.

Wal-Mart’s track record at its international operations has been uneven online cash advance. While its business has flourished in Mexico and Latin America, shopping cultures in other countries and regions have failed to respond to the sales format that proved successful in its home territory.

The Bentonville, Arkansas-based company sold its German operations to rival German retailer Metro AG in 2006 and earlier sold 16 stores it owned in South Korea.

Wal-Mart (WMT, Fortune 500) has more than 4,000 domestic stores and about 3,000 stores outside the United States. 

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