Co’s Puregold diversifies into pharma distribution

PUREGOLD Price Club Inc., which is led by businessman Lucio Co, has been given the leeway to enter the pharmaceutical distribution business as a way to diversify its product offering to consumers.

In a disclosure to the Philippine Stock Exchange on Friday, Puregold said the Securities and Exchange Commission had approved the amendments of its articles of incorporation to include “selling pharmaceutical and medical goods, cosmetic, medicines, medical formulations, food supplements, etc. in the primary purpose of the company.”

The amendment was sought to comply with the regulations of Food and Drug Administration related to the sale of pharmaceutical and medical goods, cosmetics, medicines, medical formulations, food supplements and similar products.

In his private capacity, Co entered the pharmaceutical distribution business in early 2013 with the acquisition of ThreeSixty Pharmacy, a Cebu-based drug store chain.

This allowed the retailing magnate to gain a foothold in the Visayas and fueled expectations that Puregold would venture into pharmaceutical distribution.

The acquisition was made through a tightly held company and not through any of the publicly listed companies affiliated with the Cos.

A change in the primary purpose of Puregold, however, gives the group the option to fold this business into the publicly listed entity in the future.

At the time of acquisition, ThreeSixty Pharmacy had about 63 stores, mostly concentrated in Cebu while a few stores are in Leyte and Bohol.

A new player in pharmaceutical distribution, ThreeSixty Pharmacy was established in Cebu in 2010 by the Yap family, which is also into furniture exports and merchandise trading business.

Aside from retailing, ThreeSixty Pharmacy has a wholesale division that aims to serve the neighboring cities and provinces in the Visayas.

Through Cosco Capital, the parent firm of Puregold, the Co-led group has ventured into other retailing formats.

In 2014, it announced the acquisition of Office Warehouse, a retailer of school and office supplies.

Puregold is the operator of the country’s second largest grocery chain.

It booked a consolidated net income of P3.2 billion for the first nine months of 2015, 6.5 percent higher year-on-year.

Consolidated net margins for the period stood at 4.8 percent.

During the first nine months of 2015, the group opened 16 Puregold stores, seven S&R quick-service restaurant (S&R New York Style Pizza) stores and 11 Lawson convenience stores.

It also acquired the nine-store NE Bodega supermarket and eight-store Budgetlane Supermarket.

Excluding new store openings and acquisitions, same-store sales growth stood at 3.6 percent, which the group deemed as better than expectations.

Puregold’s consolidated net sales increased by 12.6 percent year-on-year to P67.33 billion in the first nine months of 2015 due to the strong consumer demand from its existing Puregold, S&R stores and S&R New York Style Pizza stores as well as new stores opened during the year.

As of end-September 2015, Puregold had 267 stores nationwide, including a total of nine S&R stores, and 13 S&R New York Style restaurants.