Dive Brief:

• After months of investor criticism over its corporate strategy, Seven & i holdings — the parent company of 7-Eleven Inc. and 7-Eleven Japan — is now being pressured by two more of its investors, who blame the retailer’s stagnant share price on “management's attachment to a conglomerate structure,” according to a Wednesday Reuters report.
• The latest investors pressuring Seven & i include management firm Artisan Partners and an anonymous Japanese “institutional investor” that spoke to Reuters, according to the report. Artisan Partners believes Seven & i can help close its current valuation discount by spinning off its c-store business, Ben Herrick, associate portfolio manager for the management firm, told the publication.
• This comes about a week after activist investor ValueAct submitted a motion to remove four directors from Seven & i’s board, and just two days after ValueAct requested Seven & i answer a series of questions regarding its new “strategy committee” — made to help the retailer focus more fully on its c-store segment over its broader retail and department store divisions — during its April 6 quarterly meeting.

Dive Insight:

Despite the increased pressure from investors, Seven & i held its ground on its new strategy committee, telling shareholders during its April 6 meeting that all of its board of directors voted unanimously to keep its March 9 plan and the new committee intact. 

The retailer said its updated business plan “articulates a strong focus on the successful convenience store business” and recognizes “the critical contributions ‘food’ related businesses make in a market increasingly dependent on private label and ready-to-eat meals.

“As the most important point, the strategy committee — consisting solely of the outside directors — has been created not only to advance [Seven & i’s] strategy, but also to guide its successful execution and assess strategic options (IPO, spin-off, etc.) and recommend actions and/or changes,” Seven & i said in a Thursday announcement.

Seven & i’s recent bout of investor pressure began in January, when ValueAct proposed a tax free spinoff of 7-Eleven from Seven & i, with the investor claiming the c-store chain would see a higher shareholder value moving forward if it were separate from the holding company. Seven & i responded in March by creating the strategy committee, aimed at helping focus the retailer on its c-store segment and away from its broader retail and department stores.

Upon hearing this plan, ValueAct moved to oust the Seven & i directors, including President Ryuichi Isaka and Vice President Katsuhiro Goto, Nikkei Asia reported at the time. 

Last week, ValueAct said Seven & i’s March plan “failed to meet expectations,” continued its conglomerate structure, and confused and disappointed stakeholders, leading to ValueAct’s shareholder meeting request. 

Since that March announcement, Seven & i’s shares have fallen more than 10%, according to Reuters.

7-Eleven has more than 79,000 stores across 20 countries, including over 20,000 in Japan and 13,000 in the U.S.