Investing Stocks in Philippines: FamilyMart

Showing posts with label FamilyMart. Show all posts

Wednesday, February 20, 2013

Stock News 2013: Ayala-Rustan retail venture eyes 300 stores

FamilyMart (Photo credit: buck82)

Japanese retailing chain FamilyMart, a retail store chain brought to the Philippines by the Ayala and Rustans groups, plans to scale up its operations to hit 300 stores over the next five years.

For this first year of operations, the target would be to roll out 30 FamilyMart stores in Metro Manila, according to Ayala Land Inc. chief finance officer Jaime Ysmael.

Ysmael said the group would be open to franchising the brand to accelerate growth. At the same time, he said the group would put up stores in various formats.

Capital spending for each convenience store is estimated at P2 million. Since the retail space would mostly be rented, Ysmael said the cost would be for store fit-out and inventory.

ALI is debuting into the convenience store business under the FamilyMart brand, the world’s second-biggest convenience store operator, in partnership with the Rustans group and Japanese conglomerate Itochu.

ALI and the Rustans group, through their equally owned joint-venture firm SIAL CVS Retailers Inc., signed last November a deal with FamilyMart Co. Ltd. and Itochu Corp. for the development and operation of FamilyMart convenience stores in the Philippines.

The deal is seen heating up competition in the 24-hour retailing format, which has 7-Eleven and Mini-Stop chains as the leading players. Philippine Seven Corp., the local licensee and operator of the 7-Eleven stores, has 781 stores as of end-September while Mini-Stop, which is controlled by the Gokongwei group, operates more than 300 stores.

“The partnership, which combines ALI’s expertise in developing mixed-use developments and its retail partners’ proven track record in the business, will enable ALI to provide a retail format that will support its mixed-use communities and, at the same time, grow its recurring income portfolio,” ALI said in an earlier disclosure to the Philippine Stock Exchange.

On the equity structure of the business, SIAL will get the controlling 60-percent stake while FamilyMart and parent company Itochu will own 37 percent and 3 percent, respectively. Both FamilyMart and Itochu are listed on the Tokyo Stock Exchange.

FamilyMart has more than 20,000 stores in Japan, Taiwan, South Korea, Thailand, China, United States, Vietnam and Indonesia. Its biggest shareholder, Itochu, is one of the largest Japanese trading conglomerates whose businesses include food, logistics services, textile, machinery, and information and communications technology.

SIAL is 50-percent owned by ALI’s subsidiary Varejo Corp. and 50-percent by Specialty Investments Inc., a unit of upscale retailer Stores Specialists Inc. (SSI), one of the biggest specialty retail companies in the Philippines, with the exclusive rights to sell, distribute and market in the country a variety of brands from around the world.

http://business.inquirer.net/107837/ayala-rustan-retail-venture-eyes-300-stores

Monday, November 19, 2012

Stock News 2012: Ayala, Rustan’s plan dep’t store chain

Shangri-La Plaza (Photo credit: Brian Sahagun)

Ayala Land Inc. will soon debut into the department store retailing format in partnership with the Rustan’s group by investing in the anchor tenant of a new Ayala shopping center rising in Fairview, Quezon City.

This will implement an earlier announced equal joint venture with the Tantoco family’s Specialty Investments Inc. (SII) to “pursue opportunities in the Philippine retail sector.”

ALI and Rustan’s are likewise investing in the 24-hour convenience store business under Japanese retailing chain FamilyMart, the world’s second-largest convenience store operator.

Although a late entrant in the high-volume but low-margin retailing business in department store and convenience store businesses, ALI is confident that having Rustan’s as a partner would create a “formidable” alliance that could effectively compete in this segment, said ALI chief finance officer Jaime Ysmael.

In a talk with reporters at the sidelines of the Securities and Exchange Commission hearing on foreign capital computation, Ysmael said ALI was now developing a new mall—Fairview Terraces—whose anchor tenant would be a department store co-owned by the Ayala-Rustan’s partnership. Typically, he said the anchor tenants in Ayala’s shopping centers would occupy about 10,000 square meters of retail space like Landmark (in Glorietta and Trinoma) or Gaisano (in Market!Market!).

“We haven’t come up with the name yet,’ Ysmael said, when asked what would be the branding for the upcoming Ayala-Rustan’s department stores. “Close to opening, that should be available,” he said. Parkview Terraces is expected to open by the end of next year.

This would not mean that ALI would no longer provide retail space to other department store operators in other upcoming malls, Ysmael said. “We will still have that kind of relationship with existing partners. It’s just that we want to put up our own so that we can move faster than that we’ll be able to do if we don’t have our own department stores. But those (other) stores will continue. They are longtime partners,” he said.

Ysmael said Rustan’s, apart from being the dominant retailer for the high-end segment, had a vast experience in the broader consumer market through its Shopwise grocery chain. “We’re confident that the partnership will be able to compete,” he said.

For the convenience store business, which is in partnership with FamilyMart and Japanese conglomerate Itochu, Ysmael said this should also be a “formidable” retail format.

The partnership is investing about P200 million to jumpstart the business. While the initial target is to set up 30 stores in the first year of operations, Ysmael said it should roll out “a couple of hundred stores to be able to make a difference.” As Ayala has hundreds of property developments across the country, Ysmael said the rollout should not be a problem.

“We’re positioning also in other areas, not just in our developments, but the priority is to locate in our developments,” he said.

http://business.inquirer.net/92476/ayala-rustans-plan-dept-store-chain