Puregold sets aside P5.5B for expansion
MANILA, Philippines—Puregold Price Club Inc. has earmarked about P5.5 billion to open more stores, fast-track the expansion of its upscale membership shopping chain and acquire similar players in 2015.
Puregold will also roll out starting February next year its newest store format, the 24/7 convenience store venture with Japanese retailer Lawson, Puregold president Leonardo Dayao told reporters last week.
Capital spending for Lawson is not yet included in the budget outlay for 2015, during which Puregold plans to open about 50 stores.
Each store is projected to cost around P5 to P6 million.
For parent conglomerate Cosco Capital Inc., capital spending for next year is separately estimated at P2 billion to P2.5 billion. This will be for the acquisition of existing malls and the development of three to four community malls at an estimated cost of P400 million each, Dayao said.
“Cosco is more for commercial real estate,” Dayao said.
For Puregold, about 25 new stores are programmed to be opened under the flagship brand next year at an estimated cost of P2.5 billion while P1.5 billion will be for the expansion of the S&R Membership Shopping network. The remaining P1.5 billion is allotted for potential acquisitions, which Dayao said would be in line with Puregold’s business.
Dayao said that for Puregold’s retailing business, the group was “very optimistic” about the coming year. “In terms of competitive landscape for us, I think we are in a very good competitive position. All the big names in retail are in the middle market. The only one that’s really focusing on the lower C, D and E income groups is us. We’re also the only one that’s focusing on the sari-sari (small neighborhood) stores,” he said.
For S&R, which targets the more upscale market, Dayao said this was the only brand adopting such kind of membership shopping club format.
“As of now, we don’t have a competitor, so we’re very optimistic of the prospects for Puregold next year,” he said.
The group is accelerating the expansion program for S&R by opening two new stores each year in the next five years, Dayao said. The earlier target was to open just one new S&R store every year.
“We identified that there’s a much bigger market than what we thought at first for that kind of a format, for the high-end (segment),” Dayao said.
When the group programmed the previous one-store-per-year expansion program for S&R, Dayao said the domestic economy was not growing as fast as it is today. S&R will open its newest store on Dec. 14 in Imus, Cavite.
Next year, the group expects to open another one in Luzon and another in the Visayas. There are currently eight S&R stores in operation.
For Puregold, the group’s opening of 28 stores brings the yearend total to 233 stores.
