As more stores open, HBC expects sales to double

HBC Inc., a retailer of beauty and personal care products, expects sales to double in five years as it opens more stores to cater to increasing demand, a major stockholder said last week.

Danny Lizares, country manager of Dubai’s Abraaj Group in the Philippines, said HBC already has 225 stores with annual revenues of P2.5 billion.

He said a possible exit for the fund would be an initial public offering for the Hortaleza-owned company.

The Hortalezas are also behind Splash Corp., a Philippine Stock Exchange-listed firm that manufactures beauty products sold in HBC outlets.

Abraaj owns about 37 percent of HBC, Lizares said.

HBC is growing at about 10 percent to 15 percent annually, he said. This could accelerate as the company opens more stores.

“We have different formats. There are full-stores and kiosks. The kiosks are low-capex (capital investment), so we will probably grow more of the kiosks,” Lizares told the Inquirer in an interview.

The stake in HBC was originally negotiated by Lizares under Aureos Capital before the private equity firm was acquired by the Abraaj Group in 2012.

HBC is the group’s second remaining investment in the Philippines, apart from Pancake House, a listed operator of restaurants like the flagship Pancake House, Yellow Cab pizza chain and Teriyaki Boy.

Aureos Southeast Asia Fund was listed as owning 14.2 percent of Pancake House as of September this year. The stake has been on the selling block for a few years now. Lizares said they were in talks with potential buyers.

The group recently exited its healthcare investment, the 100-bed Daniel O. Mercado Medical Center in Tanauan City, Batangas after selling its roughly 33-percent stake back to the owner for “fantastic returns,” Lizares said.

Aureos made the investment in 2010.

The hospital was subsequently sold to property giant Ayala Land Inc., which is looking to add healthcare facilities to increase the attractiveness and value of its mixed-use developments.

Under Abraaj, the hospital constructed the Mercado Ambulatory and Surgical Center, a state-of-the-art diagnostic and outpatient facility.

Lizares said that Abraaj remains keen on increasing its footprint in the Philippines. He said the company is prepared to make new investments in consumer-oriented sectors like retail, healthcare and logistics.  Miguel R. Camus