BIZ BUZZ: Ayala gets a second wind in retailing

MANILA, Philippines – The country’s oldest conglomerate had shied away from retailing for years. After unloading its interest in the likes of Burger King, Wellworth and FamilyMart, it had opted to be but a landlord to foreign and local consumer brands.

But under a new generation of leaders, Ayala Corp. is noticeably getting back into the retailing game more aggressively, riding the country’s favorable demographic profile.

It has struck a 50-50 percent partnership with Australia’s Kmart group to bring Anko to the Philippines, which has become the brand’s gateway to Southeast Asia.

READ: Aussie lifestyle retailer picks the Philippines as gateway to Asia

In food and beverage, through corporate venture capital firm Kickstart, Ayala has likewise invested in the fast-growing PickUp Coffee chain.

On July 9, Anko opened its third and largest store (after Glorietta in Makati and Alabang Town Center) in the country to date. The newest store occupies a 1,634-square-meter space at Trinoma (Quezon City), one of the group’s busiest shopping malls.

Bringing Anko to the country is the brainchild of eighth-generation scion Mariana Zobel de Ayala, who discovered the white-labeled business of Kmart group during a trip to Sydney.

Zobel indicated to Biz Buzz that this time around, Ayala is more confident in reentering the lucrative but highly competitive retailing space.

“I think this time we have a dedicated team that’s really focused. We’ve also brought in experts who have done retail both locally and abroad,” Zobel told us, while shopping for toys and cookware at the newest branch of Anko.

“And we think there’s so much more to serve the Philippine market with. We feel the Filipino is quite underserved when it comes to retail and that’s kind of what drives us,” Zobel added.

Through Ayala Land, the group could have just opted to lease space to Anko, but we heard that Kmart would only agree to do business in this market if the storied conglomerate would be its partner.

“They wanted a partner with local know-how, which makes sense,” Zobel said, when asked about it.

Apart from being the Australian group’s first market in Southeast Asia, the Philippines is also Anko’s first offline market, as it was mostly into digital retailing.

“So it’s a bit of a risk for them, but we’ve been so shocked with the results,” Zobel said.

“We couldn’t have expected how it would be received. Our sales targets have been surpassed many times over, which tells us that the Filipino is really hungry for more, for quality and for value,” she said.

With Ayala Land sprucing up most of its malls and building new ones, expect Anko to become a mainstay and therefore a key driver of growth. To date, there are 34 Ayala malls across the country.

“I would love to see one Anko in every Ayala mall,” Zobel explained.

“I see it as the anchor of the future. I see it as a wonderful option in a world where people want a more curated kind of option to department stores.”

Being an expert in online retailing, one can imagine how Anko could easily expand beyond brick-and-mortar selling in the coming years. —Doris Dumlao-Abadilla

Villar’s next bet

The Villar Group is eyeing yet another business to add to its cart, possibly making it this company’s last hope.

We’re talking about Philippine Associated Smelting and Refining Corp. (Pasar), which Bloomberg reported to be up for sale.

Citing sources familiar with the matter, Bloomberg said Swiss multinational commodity trading and mining firm Glencore Plc’s copper refinery had long been struggling, mainly due to low processing fees in the smelting industry.

Glencore has been exploring the sale of Pasar and its Leyte refinery, which stores copper concentrates from Australia, Indonesia and South America, since “at least late last year,” Bloomberg said.

“[S]melters have been reeling from a collapse in the fees they get from miners as there’s too much refining capacity fighting for not enough feedstock,” it added.

The Villar Group has yet to confirm the report, but it’s important to note that this isn’t Manny Villar’s mining debut.

The real estate mogul and the Philippines’ richest man currently owns St. Augustine and Copper Ltd., which began seeking potential foreign partners for the King-king copper-gold project in Davao de Oro province.

READ: Villar’s King-king mining firm wooing foreign partners

It is unclear whether he has found an investor for the $2-billion mine site.

Who knows? Maybe it will push through just in time for the Glencore deal. —MEG J. ADONIS