By Megumi Fujikawa 

TOKYO -- Seven & I Holdings Co., the parent of 7-Eleven, said it would expand its profitable convenience-store business in North America and seek acquisition opportunities there, after prodding from U.S. activist investor Daniel Loeb of hedge fund Third Point LLC.

The company also plans to divest itself of some unprofitable businesses in Japan, including department stores.

"We will speed up expansion in North America by accelerating acquisitions," said Ryuichi Isaka, president of Tokyo-based Seven & I, at a news conference Thursday.

Mr. Isaka took over as president of the company after a boardroom clash earlier this year that resulted in the resignation of Toshifumi Suzuki, who had been at the helm since 1992.

Mr. Isaka survived the battle with Mr. Loeb's backing after the activist investor criticized a plan by Mr. Suzuki to oust Mr. Isaka. Mr. Suzuki's plan was rejected by the company's board in April. Mr. Loeb, whose Third Point fund owns hundreds of millions of dollars in Seven & I common shares, had advocated for the company to focus on its convenience stores and turn away from department stores.

On Thursday, Mr. Isaka avoided saying directly whether he took Mr. Loeb's opinions into consideration when planning his new business strategy. Instead, he said he is confident that it will satisfy all shareholders.

Seven & I plans to increase its store count in North America to 10,000 by fiscal 2019; at the end of June, it had nearly 8,900 stores in the U.S. and Canada. More than 80% of convenience stores in the region are owned by smaller companies or individual proprietors, which Mr. Isaka said made for plenty of acquisition opportunities.

Some elements of the Japanese-style convenience-store model will be introduced in North America, he said. Counters featuring hot snacks are already part of most 7-Eleven stores in Japan and some overseas. Mr. Isaka said he wanted to introduce these counters to more stores in North America and wanted the stores to offer more fresh food such as sandwiches.

The company has already embarked on its North American expansion. In June, it said it would buy 79 gasoline stations and convenience stores in California and Wyoming from CST Brands Inc. At the end of June, Seven & I had 59,831 7-Eleven stores world-wide, including 18,785 in Japan.

On the department-store front, Seven & I said domestic retailer H2O Retailing Corp., will operate some of its department stores in western Japan. Mr. Isaka said H2O was selected because it has achieved high operating margins and has experience with department stores.

In the March-August period, Seven & I posted an operating profit of 181 billion yen ($1.75 billion); Yen160 billion of that came from convenience-store operations. It reported an operating loss of Yen1.82 billion for its department-store segment.

Convenience-store competition has also intensified at home. A merger of two smaller rivals created the country's second-largest chain of convenience stores, called FamilyMart UNY Holdings Co. Meanwhile, Mitsubishi Corp. is trying to enhance operations at Lawson Inc., the third-largest convenience-store operator, by raising its stake and making it a consolidated subsidiary.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

(END) Dow Jones Newswires

October 07, 2016 02:47 ET (06:47 GMT)