THE Metro Retail Sales Group Inc. (MRSGI) of the Gaisano family from Cebu is set to pay property giant Ayala Land Inc. (ALI) and retail leader SSI Group Inc. (SSI) close to half a billion pesos for buying their 50-50 joint venture Wellworth Department Stores.
In separate disclosures to the Philippine Stock Exchange on Thursday, ALI and SSI said the cash involved in the purchase was P498.81 million, payable in four tranches.
The partners said 25 percent of the purchase price would be paid on March 1, July 31, and December 31, 2016, and on June 30, 2017.
On March 1, the three companies disclosed their signing a deed of absolute sale of the store assets of SIAL Specialty Retailers, Inc., ALI and SSI’s joint venture operating Wellworth Department Stores, at Fairview Terraces Mall and UP Town Center, both in Quezon City.
Last week, MRSGI said it spent P124.7 million as partial payment for the transaction, out of the proceeds from its initial public offering last year.
Not yet disclosing the purchase price at that time, SSI President Anthony Huang said the assets sold were worth less than five percent of the book value of SSI.
The specialty store operator said the sale includes the fixed assets and equipment used in the operations of the two Wellworth stores.
“The transaction will allow MRSGI to expand its network of department stores in these two key locations, by a combined total gross floor area of approximately 25,000 square meters,” MRSGI said.
As for ALI, it said the deal was in line with the firm’s plan to focus on its core business of property development and leasing.
SSI noted that the sale includes such assets as fit-out, furniture and equipment of the two acquired Wellworth department stores.
“The sale of the department store assets is aligned with SSI’s strategy to focus its resources on its core specialty retailing business and on its convenience store business,” SSI said.
Founded by couple Victor and Sally Gaisano from Cebu, MRSGI has been in the market for 33 years, mutating from Gaisano Metro to Metro Gaisano to its present name.
With three formats—department store, supermarket, and hypermart—the homegrown retail firm said it now has 47 stores with over 9,000 employees and foot traffic of over 250,000 shoppers daily.
The three firms noted that MRSGI is the largest department store and hypermarket operator in terms of retail value sales in the Visayas.
Wellworth Department Store was first opened in May 2014 in Fairview Terraces Mall and later in the U.P. Town Center, both developments of ALI.
Wellworth was meant to be part of ALI’s mixed-use developments.