Conglomerate SM Investments Corp., the holding company of tycoon Henry Sy, said Wednesday it plans to consolidate all retail-related businesses under an umbrella company that will boost retail sales by 16.7 percent to P251 billion from P215 billion before the merger.
SM Investments said in an investor presentation that the merger of all retail-related businesses under SM Retail would add greater diversity and a more extensive footprint to group’s portfolio.
The merger will also be earnings and value accretive and will improve returns, it said.
SM Investments said after the merger, it would a 77.3-percent interest in SM Retail while the Sy family would continue to own a 22.7-percent stake.
Aside from higher revenues, the combined entity will have 1,927 outlets and 2.4 million square meters of gross floor area across a diverse portfolio of food, household appliances, DIY, furniture, apparel, footwear, pharmaceuticals/cosmetics and specialty retailing stores.
Prior to the merger, SM Retail only has 553 stores and 1.8 million sqm of GFA.
SM Investments is also expanding its minimart store concept under Alfamart. The conglomerate said while Alfamart remained in the testing phase, it now has 126 branches of Alfmart mostly in provincial areas south of Metro Manila.
SM Investments said the minimart concept was different to convenience store, as it offers supermarket pricing and ready-to-cook items versus ready-to-eat products. Alfamart stores are also located mostly in residential areas.
Prior to the merger, SM Retail operates 53 SM department stores, 44 hypermarkets and 213 supermarkets and majority stakes in the local operations of Alfamart, Forever21, Crate & Barrel and other specialty and apparel retailers in addition to a minority stake in Uniqlo.
Among brands that will be added to SM Retail after the merger are Ace Hardware, SM Appliance Center, Homeworld, Our Home, Toy Kingdom, Watsons, Kultura, Baby Company, Sports Station and several other specialty stores.
SM Retail is one of the leading retail companies in the Philippines, along with Robinsons Retail Holdings Inc. of the Gokongwei group and Puregold Price Club Inc of businessman Lucio Co.
This is the second consolidation undertaken by Sy group. In 2013, the conglomerate also consolidated property-related businesses under SM Prime Holdings Inc., which enabled it to become one of the leading integrated property developers in Southeast Asia.