SM confirms talks to invest in Goldilocks

Goldilocks president Richard Yee

The country’s most valuable conglomerate SM Investments Corp. confirmed on Tuesday ongoing discussions to diversify into the fast-food business through a potential investment in Goldilocks bakeshop chain.

Asked to comment on an Inquirer report dated Aug. 29 about discussions to buy Goldilocks, SMIC told the Philippine Stock Exchange it’s in “preliminary discussions for a possible equity investment, joint venture or other cooperation arrangement with Goldilocks Bakeshop.”

“However, the said potential investment is pending and subject to regulatory approval by the Philippine Competition Commission,” SMIC said.

PCC is the country’s anti-trust body which is mandated under the Philippine Competition Act to review mergers and acquisitions to ensure that these deals will not prejudice the interest of the consumers. The PCC is mandated to review deals valued at P1 billion or above.

“Goldilocks will be a good addition to the growing retail brands that SM carries to serve customers in a way that integrated its retail business to service various products to the public,” said Marvin Fausto, fund expert at COL Financial.

The prospective entry into the Goldilocks chain is seen to add a new format to the SM group’s retail business, already the biggest in the country. This is likewise seen as a brand with potential to grow its overseas presence as well as to expand further through franchising.

Goldilocks is a 51-year-old privately-held restaurant chain run by the Yee family, with stores estimated at over 500, based on the company’s website. Apart from its nationwide footprint, the group has set up shops in the US, Canada and Thailand. Revenues as of 2015 amounted to P7.86 billion, out of which it generated net profit attributable to equity holders of parent amounting to P225 million.

For its part, SM Retail has a total of 2,357 stores under its portfolio, comprising of 58 department stores (The SM Stores), 1,709 specialty stores, 50 SM Supermarkets, 44 SM Hypermarkets, 170 Savemore stores, 41 WalterMart stores and 285 Alfamart stores as of end-June.

The entry of the SM group in Goldilocks is also seen to be a big boost to the restaurant chain, the group being the biggest developer of shopping malls in the country.

Goldilocks was founded in 1966 by sisters Milagros and Clarita and their sister-in-law Doris, decided to open a small bakeshop along Pasong Tamo Street in Makati. A third sister, Maria Flor, suggested that they name the enterprise “Goldilocks“, after the character in a fairy tale, intending to make brand recall easier and also because the name suggested luck and prosperity.

There have been previous attempts by other restaurant groups to acquire Goldilocks in the past. Over a decade ago, Pancake House – then led by the Lorenzo family – initiated discussions to acquire this chain but the talks did not prosper.