Major Tokyo Department Store Workers Go on Strike Over Sale Dispute
Tokyo, Japan – In a major show of dissent, workers at the Seibu department store in Tokyo went on strike on Thursday after failed negotiations with management over the planned sale of their company. This marks the first significant walkout by a major Japanese department store in over six decades. Approximately 900 workers at the flagship Seibu store in Ikebukuro are protesting the sale of Sogo & Seibu, a subsidiary of Japanese retail giant Seven & i, to U.S. fund Fortress Investment Group.
The workers are demanding guarantees for job security and business continuity, expressing their dissatisfaction with plans that reportedly involve discount electronics retailer Yodobashi Holdings taking over approximately half of the store. Critics, including officials in Ikebukuro, argue that such a change would diminish Seibu’s reputation by replacing individual boutiques within the store.
Seven & i announced that the deal would be finalized on Friday, but stated that they have decreased the sale value of Sogo & Seibu by $205 million after requesting Fortress to consider the continuation of Sogo & Seibu’s business and employment. As part of the agreement, Seven & i will also waive $829 million in debt, more than half of the amount lent to its subsidiary.
Fortress has released a statement expressing their commitment to work with Seven & i to support Sogo & Seibu’s management and maintain their workforce as much as possible. They plan to invest over $180 million with partner Yodobashi to renovate Sogo & Seibu’s stores.
Strikes are extremely uncommon in Japan, where negotiations over wages and work conditions are usually settled amicably. This one-day strike is the first by a major Japanese department store in 61 years. It follows months of negotiations between Sogo & Seibu management and the workers’ union and occurs against the backdrop of a severe labor shortage in Japan.
During the strike, Seibu workers gathered in front of the store under the scorching summer heat while members of various other unions handed out flyers to show their support. Seven & i issued an apology for the strike and stated that they would continue discussions with the union. Other Seibu and Sogo department stores operated as usual.
Union leader Yasuhiro Teraoka expressed regret but also acknowledged the struggles the business is facing. He stated, “Maybe it was our failure not to have raised our voices until now… but I believe that having so many people see and hear what we had to say made it a significant event.”
This strike comes at a time when Japan is experiencing an exceedingly tight labor market. While workers at major companies secured significant wage increases this spring, these gains have been offset by a 41-year high in inflation, resulting in falling real wages.
Labor groups from rival department stores, including Takashimaya and Isetan Mitsukoshi, expressed support for Sogo & Seibu’s workers. Professor Wakana Shuto of Rikkyo University, who specializes in labor issues, believes that this case has provided encouragement to many workers and that the conditions faced by Sogo & Seibu are not unique considering the industry’s challenges.
The Seibu store in Ikebukuro is the third-largest department store in Japan based on sales. However, its parent company, Sogo & Seibu, has reported losses for the past four years.
For foreign funds looking to restructure Japanese brands, this strike raises concerns about potential obstacles, according to Tokyo-based corporate lawyer Stephen Givens. He emphasized the importance of considering the satisfaction of employees who manage and work for the company during the acquisition process.
The sale of Sogo & Seibu is set to proceed despite the strike, but the workers’ union remains determined to fight for their interests and work towards a fair resolution.
(Reporting by Ritsuko Shimizu, Mariko Katsumura, Kaori Kaneko, and Rocky Swift; Writing by Chang-Ran Kim; Editing by Edwina Gibbs and Stephen Coates and Miral Fahmy)