Aeon, Japan Post say to expand cooperation

Japanese retailer Aeon Co. and Japan Post [JP.UL] said on Monday they would expand their cooperation in delivery services and postcard sales, a move that could grow into an alliance in financial operations.

Aeon, the country’s second-biggest retail conglomerate after Seven & I Holdings , and Japan Post had already joined forces in some areas, including handling of the national postal service provider’s Yu-Pack parcel post at the retailer’s Ministop convenience store chain outlets.

Aeon’s shopping centres and stores also house seven post offices, and that number is increasing.

Japan Post, which has a network of nearly 25,000 post offices and some USD3 trillion in assets, is scheduled to be gradually privatised from next year, intensifying competition with rivals such as parcel delivery firm Yamato Holdings Co. .

Under the new agreement, Aeon will use the Yu-Pack parcel post service to send its gift products from the year-end shopping season. Japan Post will in turn continue taking orders for Aeon’s gift products at its branches, and Aeon will sell Japan Post’s 2007 New Year postcards at its stores.

Japan Post President Masaharu Ikuta said the alliance with Aeon could expand into financial operations. The retailer is preparing to enter the banking business in early 2007.

“We will first get support in our struggling mail operations, and we will broaden alliance talks to other areas, including financial operations,” Ikuta told a news conference.

Aeon President Motoya Okada said Aeon aims to increase its use of Japan Post to send about 60 percent of its gift products, versus the current 10 percent, which would entail lowering its usage of Yamato from the current 80 percent or so.

Shares in Aeon closed down 0.7 percent at 2,705 yen after the company and Japan Post said they would jointly hold a briefing. The Nikkei average ended down 0.01 percent.