• Robinsons Retail targets 1,400 stores by 2014; eyes P32-B IPO

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    The retail group of the Gokongwei family, Robinsons Retail Holdings Inc. (RRHI), will spend as much as P3.5 billion for its stores expansion alone, targeting to hit 1,400 stores by the end of 2014.

    Justiano Gadia, general manager of RRHI, said during the company’s investor roadshow held on Monday that the company is currently focusing on strengthening its market leadership, planning to aggressively increase its stores to 1,400 by 2014.

    “There are 940 stores as of June, 980 stores as of September, we are nearly 1,000 stores today, and we have little less than 400 stores to build at the end of 2014. And of that, there are 250 identified sites for the stores we are going to build,” RRHI Chief Strategist Bach Johann Sebastian told reporters in a briefing.

    For the establishment of new stores, Sebastian said that the company would be needing about P3.5 billion capital expenditure.

    RRHI Vice Chairman and Director Lance Gokongwei said that the group also plans to consolidate with other stores as well as acquire new brands.

    ”Our premise in retail will consolidate. As the middle class grows, shoppers are increasingly going into modern retail,” he said.

    ”We can see that in general, the larger players like SM, Puregold and Robinsons will continue to grow faster than the industry as a whole,” he added.

    P32-billion IPO
    Meanwhile, RRHI decided to raise as much as P32 billion from its initial public offering (IPO) from the original gross proceeds of approximately P42 billion.

    During the company’s IPO domestic investors’ briefing held on Monday, Maybank ATR Kim Eng Capital Executive Director Dennis Du announced
    that the IPO price range for RRHI’s shares will be P55 to P66 per share, lower than the previous maximum price range of P86.64 apiece.

    Given the price range, the group will raise P26.7 billion to P32 billion through its IPO, down from the company’s previous target of about P42 billion.

    ”When we first filed the price of P86, that was done in June. So those were preliminary estimates. When you file a filing price, you try to file at the highest possible price. The current price range already has the benefit of price discovery,” Sebastian said, explaining that the new price range is comparable with other listed retail firms in the region.

    ”Clearly, we wouldn’t go out with the price that we didn’t think will not be attractive,” Gokongwei added.

    The international roadshow of RRHI for its public offering will start today and will last until October 24. Besides Hong Kong, the company will hold roadshows in Singapore, London, Scotland, New York City and Boston.

    More than a week ago, the local bourse gave the green light for the retail group to proceed with its IPO this month after having postponed it some time in June.

    In a memorandum earlier posted at the website of the exchange, RRHI said that the  final price of its IPO will be set on October 25, while the share sale period will be from October 29 to November 5.

    Madelaine B. Miraflor

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