* Walmart Japan CEO: long-term aim is to list minority stake
* Media reports said last year that Walmart eyed Seiyu sale
* Walmart, other foreign supermarkets have struggled in Japan (Adds background on Seiyu business, executives' comments)
TOKYO, June 26 (Reuters) - Walmart said it aims to list its Japanese supermarket unit Seiyu while keeping a majority stake in the business, amid on-and-off speculation the U.S. retail giant was looking to exit Japan where it has struggled to grow.
Lionel Desclee, who was hired earlier this year as CEO of Walmart Japan, said in a speech to employees on Wednesday that Walmart would remain invested in Seiyu.
"We also have a longer-term aspiration to list a minority stake of our business in Japan," he said in a speech, according to a Walmart Japan statement.
"We believe a Japan listing would empower Seiyu to accelerate the journey of building a strong, innovative local value retailer both in-stores and online, while still enjoying the benefits of being powered by Walmart," he was also quoted as saying. No time-frame for a listing was mentioned.
Walmart first entered the Japanese market in 2002 by buying a 6 percent stake in Seiyu, and gradually built up its stake before a full takeover in 2008.
But Japan has proven a difficult market for Walmart and other foreign entrants such as Tesco PLC and Carrefour SA. Japanese media reported last year that Walmart considered selling Seiyu, and that a sale could amount to around 300 billion to 500 billion yen ($2.69 billion to $4.48 billion).
Consumers in Japan demand fresh food and efficient customer service, and the country's supermarket industry is highly competitive and its margins razor thin after years of deflation.
Judith McKenna, CEO of Walmart International, was also quoted in the statement as supporting a potential public listing of Seiyu with Walmart retaining majority ownership.
Under Walmart, Seiyu has closed unprofitable stores. It also teamed up with Rakuten Inc last year to launch an online grocery venture, facing off against rivals such as Amazon's Fresh service. (Reporting by Ritsuko Ando and Sam Nussey; Editing by Himani Sarkar and Muralikumar Anantharaman)