SM, Waltermart join forcesBy Doris C. Dumlao
Philippine Daily Inquirer
Tycoon Henry Sy seeks to cement his leading position in the Philippine retailing and shopping mall businesses by forging an alliance with the Waltermart group of the Lim family.
In a disclosure to the Philippine Stock Exchange on Monday, SM Investments said it had entered into a joint venture with the Waltermart group through its subsidiaries SM Retail Inc. and SM Prime Holdings Inc.
The terms of the partnership are still being finalized and thus cannot be disclosed yet, said Cora Guidote, head of investor relations at SMIC.
“This is an opportunity to further strengthen our position in both the mall and retail business,” Guidote said.
The Waltermart group of the family of Wilson Lim has been in the retailing business for over 20 years. Based on its website, it has 17 community malls located in Batangas (Tanauan), Laguna (Sta. Rosa, Calamba and Makiling), Cavite (Carmona, Dasmariñas, General Trias and Trece Martires), Metro Manila (Sucat, Makati, North Edsa and E. Rodriguez), Bulacan (Plaridel, Guiguinto and Santa Maria), Pampanga (San Fernando) and Nueva Ecija (Gapan).
“From a strategic perspective, this is a good counter-move on the part of SM Retail, which lost some market share to Puregold in recent quarters. It signals to Puregold that SM is willing to defend its core markets. At the same time, [it] limits the M&A (merger and acquisition) options of Puregold. If Puregold had plans of expanding into the department store and mall operations market, this joint venture just made it much tougher to execute those plans,” said Jose Mari Lacson, head of research at local brokerage Campos Lanuza & Co.
SM’s toughest competitor in retailing, Puregold Price Club Inc., ended last year with a nationwide network of 156 stores as the acquisition of S&R Membership Shopping (with six stores) and Parco department store (with 19 stores) chains complemented its rapid organic expansion.
For its part, SM Retail had 193 stores as of end-September last year, consisting of 46 department stores, 37 SM Supermarkets, 34 SM Hypermarkets and 76 SaveMore stores.
Excluding department stores, the food retail group comprising grocery store chains said the SM’s grocery store network likely ended the previous year with 155 stores.
On shopping mall development, however, SM remains the dominant player in the country. SM Prime ended 2012 with a total of 51 malls in the Philippines and in China, with a combined gross floor area of 6.3 million square meters.
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