Seven & I Holdings Pursues 7-Eleven Australia Despite Setback

Seven & I Holdings, a Japanese conglomerate, recently reported a disappointing quarterly result, with its first-quarter net profit dropping 35 per cent primarily due to weak performance in its overseas convenience and superstore businesses. Despite this setback, Seven & I Holdings remains enthusiastic about acquiring 7-Eleven Australia and is considered a keen bidder for the franchise.

Analysts point out that the low interest rates in Japan are pressuring companies to invest their money, making earnings less crucial for decision-making compared to other groups. While the operating profit for Seven & I’s overseas convenience-store business saw a significant decline of 52 per cent, and the superstore business experienced a decrease of 5.8 per cent, the company’s domestic store and financial services businesses showed positive earnings growth during the same period.

Notwithstanding the disappointing quarterly results, Seven & I Holdings maintains its revenue and net profit forecasts for the fiscal year ending February 2024. As the franchise owner of 7-Eleven in Japan, Seven & I Holdings holds pre-emptive rights to purchase 7-Eleven Australia. 

However, it faces competition from Platinum Equity and Ampol, the latter believed to have the ability to pay the most and gain strategic benefits from owning the operation. Nonetheless, approval from the Australian Competition & Consumer Commission remains a critical factor in determining the eventual buyer.

7-Eleven Australia, currently up for sale through Azure Capital on behalf of the Withers and Barlow families who own it, boasts impressive annual earnings before interest, tax, depreciation, and amortization of approximately $220 million. 

Operating under a license from the US-based 7-Eleven, the franchise operates 750 stores in Victoria, New South Wales, and Western Australia, with an impressive annual transaction volume of 250 million.

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