PUREGOLD Price Club Inc. said the consolidation of tycoon Lucio Co’s retail businesses will push ahead within the year, with the injection of Co’s Duty Free shops set for the early part of the fourth quarter.
Leonardo Dayao, Puregold president, told The Manila Times in a text message that the company will pursue the consolidation of Co’s two Duty Free stores in Subic, Zambales and Clark, Pampanga later in the year.
“We are looking at the fourth quarter” for the completion “of the consolidation of Duty Free stores into Puregold,” Dayao said.
The integration of Duty Free Subic and Clark into Puregold’s assets will enable the company to expand to a broader market. The Co-led firm operates different formats of Puregold stores, and its S&R Membership Shopping Warehouse recently reached a deal to bring Japanese convenience store brand Lawson into the country.
Dayao said the two Duty Free stores are undergoing valuations, which should be determined by mid-September.
“[The consolidation] depends on what the PSE [Philippine Stock Exchange] and the SEC [Securities and Exchange Commission] would require. The valuations of the two Duty Free shops are ongoing,” he said.
At the Puregold stockholders meeting in May, Dayao said the supermarket chain may use shares, cash or a combination of the two to settle the consolidation costs.
“Both companies are making money. We expect it will be accretive for Puregold,” he said.
The Duty Free shop in Clark has been privately held by Co since 1994 and the store in Subic since 1998, serving foreign travelers and tourists, as well as overseas Filipino workers. The two Duty Free shops have 3,000 to 5,000 square meters of gross floor area each.
Puregold posted a 6 percent drop in its first-half net income to P1.66 billion from P1.77 billion a year earlier, while revenues climbed 16.8 percent to P38.549 billion from P33.017 billion on higher store sales, company figures show.
The company targets to open 25 new Puregold stores and one S&R shop. Of the target, 15 new Puregold stores were opened in the first half of the year. The company had a total of 228 Puregold and S&R stores as of end-June.
The Lucio Co-led supermarket operator plans to expand into a convenience store retail format through bringing Japan’s Lawson convenience stores in the country. Puregold targets 20 percent growth in its revenues for full-year 2014.
Incorporated in 1998, Puregold primarily operates hypermarkets and retail stores. Its portfolio includes hypermarket format Puregold Price Club, supermarket Puregold Junior, discounters format Puregold Extra, high end membership shopping S&R.