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Japanese department store staff are known for their exceptional customer service. With their impeccable manners and deep knowledge of retail, these employees were once at the forefront of urban retail in Japan. They played a key role in making luxury accessible to the Asian middle class and revolutionizing the retail industry. However, a remarkable event is currently unfolding at Seibu, one of Japan’s most famous department store chains. For the first time in over 60 years, Seibu’s staff are going on strike. They are protesting against the planned sale of their company to the US investment group Fortress. This strike challenges the narrative of Japan being a bargain destination for investment.
The anger felt by the retailers is genuine. The flagship Seibu Sogo store in Tokyo’s Ikebukuro will be closed on August 31 due to the strike. Around 900 workers from one of the Sogo & Seibu chain’s 10 stores are participating in this one-day strike. While this may seem insignificant compared to the global strikes by other professions, it is incredibly rare. In Japan, the number of strikes has significantly declined over the years. In 1974, during a period of high inflation caused by oil prices, there were 5,197 strikes lasting more than half a day. By 1993, this number had reduced to 251. In 2022, there were only 33 strikes. The decline in strikes demands further analysis. Despite facing difficulties such as layoffs, overwork, and stagnant wages, Japanese workers have not shown a strong inclination towards strikes.
The decision of Seibu department store workers to strike has broader implications for the future of Japan. They are taking a stand against the potential demise of department store jobs and the direction Japan may be heading. On one hand, their company and the industry as a whole are facing a decline in customers, making them victims of innovation. On the other hand, the impending acquisition by Fortress could lead to store closures and significant job losses. The valuable real estate occupied by Japanese department stores adds to the workers’ concerns that Fortress may view the purchase as an opportunity to sell off the properties.
Furthermore, the sale of Sogo & Seibu stores to Fortress was primarily driven by pressure from a US activist investor, ValueAct. The investor has urged 7&i Holdings, the current owner, to divest from the declining department stores in order to enhance shareholder value. The sale to Fortress and the influence of activist investors should not come as a surprise. Japan’s corporate landscape, with its excess cash and vulnerability to shareholder pressure, has attracted foreign investors looking to capitalize on undervalued opportunities.
It is noteworthy that the most prominent resistance against these investors is coming from the traditionally deferential department store workers. Their defiance challenges the prevailing perception of Japanese workers as passive and complacent.
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