Metro Retail share price up on debut
SHARES of Visayan retailing giant Metro Retail Stores Group Inc. (MRSGI) firmed up on its stock market debut Tuesday, riding on the country’s strong consumer spending and favorable demographics.
Armed with fresh capital for expansion, MRSGI plans to open 50 to 70 new stores to double its nationwide retailing footprint in the next five years. It currently has about 400,000 square meters of gross floor area across 46 stores, making it the largest retailer in Visayas and the fourth largest nationwide.
The day’s most actively traded stock at the stock market, shares of MRSGI gained by 0.25 percent to close at P4 on its listing day, paring intra-day gains from an intra-day high of P4.49 per share amid the overall market downturn. Market capitalization stood at P13.68 billion at end of trading.
About P781 million worth of MRSGI changed hands on the company’s first day of trading on the PSE.
MRSGI expects a more aggressive store expansion in the Visayas, where growth in business is seen faster than in Luzon. In terms of format, the focus will be the hypermarket format, MRSGI vice president for business development Joseph Conrad Balatbat said in a briefing after the company’s listing on the local stock exchange.
To date, more than 50 percent of MRSGI’s revenue is generated outside Luzon, given that the group has 26 stores in the Visayas and only 20 in Luzon. It plans to set up shop in new places like Samar, Leyte, Iloilo and Bacolod and enter the Mindanao market by 2017 or 2018.
Balatbat added that the group was also open to opportunities to expand via mergers and acquisitions on top of organic expansion.
The firm has been planning to expand its store network by five to 10 new stores per year, sustaining the pace of expansion seen since 2010.
Arthur Emmanuel—an ex-Walmart executive hired by MRSGI as its president and chief operating officer since 2010, when the group had only 10 stores—said key learnings from his 38 years with the US retailing giant were already part of the company’s course of business since inception.
The first key learning, Emmanuel said, was that the customer was the boss, which he said was a key philosophy adopted by the group’s founding parents, Victor and Sally Gaisano.
Another key learning from Walmart is that a retailer’s biggest asset is its assortment, Emmanuel said.
“What will work in Legazpi (Albay) is not necessarily what will work in Angeles (Pampanga),” he said.
Amid competitive retailing environment, Walmart’s core value of attaining price leadership is also part of MRSGI’s game plan.
In terms of product mix, about 75 percent of MRSGI’s merchandise is purchased by the company while 25 percent comes from concessionaires. This is one differentiating factor from other retailers. The outright model is mostly observed for its supermarket and department store formats.
MRSGI, now the fourth largest in the country after SM Retail, Puregold Price Club and Robinsons Retail, has 9,700 employees nationwide. Revenue last year hit P28.54 billion while net income stood at P628.9 million.
Apart from raising fresh capital, the Gaisanos pursued public listing for MRSGI to instill discipline and a strong culture of good governance in the company that will remain for many generations to come. The aspiration is to become one of the country’s top three retailers in the years ahead.
