7-Eleven taps American executive to help keep it out of Canadian hands

Fighting off a takeover by a Canadian rival, the Japanese parent company of 7-Eleven announced a major business shake-up on Thursday that included the appointment of its first foreign-born chief executive.

Seven & i Holdings said that Stephen Dacus, 64, a member of the company’s board of directors and longtime retail executive from the United States, would take on the role in May. It also announced that it would hold an initial public offer of its U.S. business, which operates over 13,000 7-Eleven stores in the country. That company has offered about $47 billion for control of Seven & i, the largest-ever foreign-led bid for a Japanese company.

Japan’s corporate landscape, which in many ways resisted change for decades, is beginning to shift in the face of an influx of attention from foreign investors. The reshuffling at Seven & i, whose convenience stores are so ubiquitous in Japan that they are considered part of the national infrastructure, is the latest example of that transformation.

Activist investors have long pushed Seven & i to spin off its 7-Eleven convenience store business, arguing that doing so would improve the valuation of the sprawling retail group, whose businesses ranged from supermarkets to outlets that sold things like stationery and baby goods.

Seven & i said on Thursday that it had struck a deal to sell some of those peripheral retail businesses to a unit of the private-equity giant Bain Capital for about $5.5 billion. It also announced that it would buy back over $13 billion in shares by the fiscal year 2030 in order to increase their value. Seven & i, he said in a recent news conference, aimed to pivot away from a general retailer to a global convenience store champion that would focus on bringing Japan-quality foods to overseas markets, such as the United States. Junro Ito’s bid to take Seven & i private failed late last month after he was unable to secure the funding. Ito’s proposal was supported by some in the company’s higher ranks, who saw it as a means to keep 7-Eleven under Japanese control. The belief was that a founding-family-led buyout could help preserve a company culture that prioritizes values such as quality and customer experience over what it views as the typical Western focus on shareholder returns and big profits.

Couche-Tard has said it would respect and seek to learn from Seven & i’s methods of operation.

When Mr. Dacus steps into his new role, he will have to convince shareholders that Seven & i’s new structure and a leadership team led by him and others from the existing management can drive growth without the need for a sale.

Seven & i’s past leaders and its current chief executive, Ryuichi Isaka, have been Japanese executives who rose through the internal ranks, whereas Mr. Dacus has held top positions across a number of global brands.

Mr. Dacus is fluent in both Japanese and English and has worked for years as a retail executive in Japan, including stints with Uniqlo’s parent company and Walmart Japan. He spoke frequently during Thursday’s news conference about his experience working night shifts at a 7-Eleven, where his father was a franchisee.

Under Mr. Isaka, Seven & i sought to make itself more valuable by moving out of underperforming businesses to focus on 7-Eleven stores in Japan and abroad. In October, Seven & i announced plans to spin-off its supermarket division and peripheral units into a different holding company. It also set a target of roughly doubling annual sales to about $200 billion by 2030.

However, in recent months, profits from Seven & i’s convenience store business have stagnated in Japan. The situation is even worse in other markets, such as the United States. Over the three months ending in November, operating income from Seven & i’s overseas convenience store business fell a third from a year earlier.

Before its announcements on Thursday, Seven & i’s shares had fallen more than 6 percent from earlier in the week, when a Japanese media report said the company planned to refuse Couche-Tard’s offer. Seven & i denied this report on Thursday and said that it is still in contact with the Canadian retailer, and is considering its offer. He chaired an independent committee that evaluated Couche-Tard’s takeover proposal, but announced on Thursday that he will step down from this role.

Story originally seen here