Metro Retail Stores Group Inc., the Gaisano-led commercial retail store operator, is planning to open seven stores next year in line with its expansion plans.
“The company plans to open at least seven stores in 2016. They have secured 10 sites for stores that are expected to open between 2016 and 2017,” the Gaisano-led retail store operator said in a regulatory filing to the Securities and Exchange Commission (SEC).
On Friday, the SEC approved Metro Retail’s plan to go public by raising P6.17 billion from an initial public offering (IPO). The public offering will run from November 2 to 6, while listing at the PSE Main Board is targeted on November 12.
“Current store network will be expanded by opening new stores and acquiring existing retail chains. To this end, the company intends to use approximately 71 percent of the net proceeds from the firm’s offer to fund the capital requirements required for the new stores such as, but not limited to, land, building and leasehold improvements; store fit-outs and fixtures; and equipment,” Metro Retail said.
Expected net proceeds of P5.3 billion from the IPO — without the overallotment option — after offer and listing expenses and taxes, will be used for expansion of the firm’s store network (P3.7 billion), construction of a logistics and distribution center (P1.2 billion) and working capital requirements (P317.2 million), mostly for 2016 up to 2017.
The 10 sites secured for mall expansion include two in Central Visayas, one in Eastern Visayas, five in Western Visayas, and two in Metro Manila.
As of end-June, Metro Retail operates 45 stores across the country, except in the Mindanao region.
In addition to the 10 targeted store sites, the company said “there are 30 new sites under evaluation, located both in the Visayas and Luzon regions.”
“For Luzon, [the company is]evaluating four potential sites in Metro Manila, five potential sites in Southern Luzon, and five potential sites in Central Luzon. For Visayas, they are evaluating five potential sites in Central Visayas, five potential sites in Eastern Visayas, and six potential sites in Western Visayas,” Metro Retail said.
The company earlier announced a five-year plan that commits it to spend P10 billion to P15 billion budget over period, allocating P2 billion to P3 billion for five to 10 store openings annually.
The company said its expansion plan is not dependent on the IPO. It also said it is set to put up a maiden store in Mindanao by 2017 at the earliest.
Other than store expansion, the Metro Retail intends to use 23 percent of the IPO net proceeds to build a distribution center and an in-house trucking operation in Cebu which will complement its migration “from an outsourced supply chain process to a company-controlled supply chain management system in order to increase the efficiency and reliability of supply operations.”
Originally Cebu based, Metro Retail was established by the Gaisano family which decided to expand in Metro Manila in the early 2000s by opening Market! Market! in Bonifacio Global City, Taguig.
To date, the company’s 45 stores are operated by over 9,000 employees serving more than 250,000 shoppers a day.
Metro Retail is present in two major retail formats: department stores (Metro Department Store) and supermarkets and/or hypermarkets (Metro Supermarket, Super Metro Hypermarket, Metro Fresh ‘n Easy Neighborhood Store).