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12 October 2016 By Quentin Webb

New boss Ryuichi Isaka’s promotion at the owner of 7-Eleven convenience stores was a major coup for investor Dan Loeb. Yet a new plan to shake up the retail giant looks timid compared to the pushy activist’s original demands. Japan Inc is open to change – but only up to a point.

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Seven & i, the Japanese retailer, said on Oct. 6 it aims to boost annual operating profit to 450 billion yen ($4.3 billion) by February 2020.

The goal is part of President Ryuichi Isaka's new "medium-term plan" and equates to a 27 percent increase compared to the company's own forecast for this financial year.

In Japan, the company will roll out a loyalty scheme and take a more financially disciplined approach on where it operates 7-Eleven stores. In addition, Seven & i will close 40 underperforming Ito-Yokado supermarkets and will develop property around city-centre locations.

Overseas, Seven & I plans to grow in North America, where it is already the biggest convenience store-operator and it will aim to increase fast-food sales.

The company retained a 10 percent return on equity goal and said it intends to pay out 40 percent of net income as dividends.

Seven & I’s previous leader Toshifumi Suzuki resigned in April after his bid to oust Isaka, then head of the 7-Eleven Japan unit, was blocked by the board. Isaka's promotion was backed by Third Point, the hedge fund run by U.S. activist investor Dan Loeb.

Seven & i shares have fallen nearly 20 percent this year, Thomson Reuters Eikon data shows.

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