October 11, 2019 / 2:03 AM / 10 months ago

Japan's Seven & I shares surge on plan to cut 3,000 jobs, shut stores

FILE PHOTO: A shopper is seen behind a Seven & I Holdings' logo at a 7-Eleven convenience store in Tokyo, Japan, April 6, 2016. REUTERS/Yuya Shino/File Photo

TOKYO (Reuters) - Shares of Japan’s Seven & I Holdings Co (3382.T) rose nearly 6% on Friday after the retail group said it will shut or relocate nearly 1,000 7-Eleven convenience stores and cut about 3,000 jobs as part of a group-wide restructuring.

The company said it will also lower franchise fees at its 7-Eleven convenience stores and offer owners more assistance to keep them open 24 hours, a move likely to hit margins.

The company has faced complaints by franchise owners, some of whom were forced to keep working amid massive snowstorms or in the wake of a family death, attracting nationwide attention and scrutiny from regulators.

It also announced on Thursday that it will accelerate closures of some Ito-Yokado supermarkets as well as poor-performing department stores under the Sogo and Seibu brands.

As a result, the company plans to cut around 3,000 jobs throughout the group over the next few years. It workforce totaled 144,628 employees as of end-February.

Seven & I Holdings reiterated its forecast of a rise 2% in annual operating profit to 420 billion yen ($3.89 billion), putting it on track for a its ninth consecutive year of record earnings.

Shares of the company rose as much as 5.9% in morning trade, their highest intraday gain in almost three years, to 4,409 yen, compared with a 0.8% rise on the Nikkei 225 average.

Reporting by Ritsuko Ando; Editing by Aditya Soni

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