Daniel Loeb was referring to Japanese retailer Seven & I Holdings Co, which owns Sogo department stores and the 7-Eleven convenience chain.
Daniel Loeb presses Seven & I to close more unprofitable stores
Seven & I has been shutting down unprofitable locations, but Loeb went on the record to say that the company should shut down Sogo and Seibu department stores. According to a company spokesman an overhaul is underway with the aim of improving profitability, and it would do “nothing more, nothing less.”
Loeb forged a reputation as an activist investor following agitations at a number of companies, from auction house Sotheby’s to Yahoo!. He is also looking to form a succession plan at Seven & I given that current Chief Executive Toshifumi Suzuki is 83 years old.
“We think the process of selecting the new chief executive rests with the board, not with Mr Suzuki,” Mr Loeb said in a phone interview on Sunday. He said that the choice should not be “Mr Suzuki’s handpicked successor who will in turn appoint his son.”
Accusations of nepotism don’t sit well with company
“The criteria used to determine the next CEO should be competence and the ability to run this company successfully, not family ties or preserving the Suzuki family dynasty,” Bloomberg quoted him as saying.
According to the spokesman, senior officials at the company found his outburst on nepotism to be “wholly unjustified.”
In recent years Loeb has paid more attention to Japanese companies. He has agitated for change at robotics company Fanuc Corp, convincing it to return some of its cash pile to shareholders.
However other investments in heavy machinery manufacturer IHI Corp and Suzuki Motor Corp have seen less success. Loeb’s Third Point hedge fund is a supporter of Japanese Prime Minister Shinzo Abe‘s corporate governance reforms, which are equities-friendly.
The size of the Third Point stake in Seven & I has not been disclosed, but the fund manager did say that the fund was a significant shareholder with a stake worth “hundreds of millions of dollars.” Seven & I boasts a market capitalization of $38 billion.