Japan's Lawson sees possible 10 percent profit rise

The president of Lawson Inc said on Wednesday that operating profit at Japan's No 2 convenience store chain could rise by as much as 10 percent year-on-year in the year to February 2013 due to supply chain improvements. President and CEO Takeshi Niinami also told Reuters in an interview that the firm would consider making acquisitions in China as part of plans to operate 10,000 stores in the country by 2020, up from the fewer than 400 outlets it has currently.
Lawson, which competes with Seven & I Holdings and FamilyMart Co in Japan, has projected a record high operating profit of 61.5 billion yen ($739.72 million) for the year to February 2012, a 10.7 percent rise year-on-year, amid increased sales of private-brand goods and higher sales to female and senior customers.
"(For the 2012 business year) profits should be 5-10 percent higher than that," Niinami said, adding that profits for the business year it has just completed will be a little higher than projected, but there will be "no surprise." A consensus estimate for an annual operating profit of 62.2 billion yen for its previous business year was forecast in a poll of 18 analysts by Thomson Reuters I/B/E/S, Lawson is set to announce full-year results on April 12.
Lawson, which has more than 10,000 convenience stores in Japan, has been looking to expand its overseas network as its home market reaches saturation and has made growth in Asia its main priority given the region's rapid economic growth. Niinami, who started his career at Mitsubishi Corp, which has a 32 percent stake in Lawson, said he expects further consolidation in the Chinese retail industry and would be open to making acquisitions if the right opportunity arises.
In addition to China, were it operates in Shanghai, Chongqing and Dalian, Lawson opened its first outlet in Jakarta, Indonesia last year and aims to open stores in Myanmar and Vietnam within one to three years, Niinami said. "We have plans to enter into (new markets) over the current year or two," Niinami added. He also reiterated the Lawson's goal to enter into India this business year, but added he need to carefully consider new laws governing the retail system be installed. Lawson has been considering taking a stake in the food sourcing and manufacturing options of India's Future Group, the country's largest retailer, according to media reports.