Metro catches up with flags in Japan.
Wholesaler Metro is pulling out of the Japanese market. The operating subsidiary with 10 stores and 1,200 employees is affected. The sales volume reaches 250 million euros. The real estate is up for sale. The whole thing is supposed to be over by the end of October 2021.
announced today (Thursday) its decision to exit its business in Japan. The retail group
operates 10 stores in the country in Kanto prefectures. In addition, the delivery business is also to be sold
In the last fiscal year 2019/20, Metro Japan posted total sales of about 250 million euros
with about 100,000 customers
, according to the statement. Ebitda at the Metro subsidiary there was around €5 million and free cash flow was €15 million. The number of employees reached 1,200
According to Metro, the company has "thoroughly analyzed alternative options to exit the market, but does not see a path for profitable growth
or an option to take a leading position in the Japanese wholesale market."
Market exit in Japan
is expected to result in one-off costs in Q4 2020/21
and free cash flow inflows from asset sales over the next two years, it said. The recurring annual inflows would be positive for both the income statement and cash flow, it said.
„Metro Japan steht seit geraumer Zeit unter Druck. Wir sehen zudem keine Möglichkeit, die erforderliche Skalierung des operativen Geschäfts in Japan zu erreichen.“
Without a future
It added that Metro Japan would "make every effort to support employees in a fair manner during the transition, adhering to employer practice standards." Commenting on the exit plans, Group CEO Steffen Greubel
said, "Metro strives to be a leader in the wholesale food industry in every market in which it operates. Metro Japan has been under pressure for some time. We also do not see the possibility to achieve the necessary scaling of the operating business in Japan in order to reach our profitability targets and sustainable sales growth. As a result, we have concluded that Metro Japan does not contribute strategically to our company's long-term goals."
At its ten wholesale stores for sale
, all located in the Tokyo metropolitan area
, Metro Japan has been serving mainly professional customers in the hospitality industry
for twenty years. "However, an uncompetitive market position combined with a highly fragmented and increasingly competitive market is limiting the company's growth potential," Metro wrote in response.
Premium supplier Classic Fine Foods remains Metro Japan has
to reposition the business, such as adapting store formats and expanding its delivery business, it said. But these attempts "did not show adequate success due to a lack of economies of scale in the country and a competitive market," it added. Metro Japan will cease operations by October 2021
, it said.
The local real estate portfolio will also be sold, it added. The portfolio includes six company-owned properties with stores and 3 sites with long-term leases. The Japan business of Classic Fine Foods (CFF)
, Metro's premium food supplier, is not affected by the decision
, it said, adding that CFF should continue to operate in Japan. (ach)