Cebu retail giant earmarks P15 billion for expansion

CEBU, Philippines - Cebu retail giant Metro Retail Stores Group Inc. is spending at least P10 billion to P15 billion to double its footprint in the next five years.

In a briefing after its annual stockholders meeting yesterday, Chairman and CEO Frank S. Gaisano said the company aims to double its current gross floor area of approximately 400,000 square meters as it also boosts its logistics and supply facilities.

Joseph Condrad Balatbat, vice president for business development, said the firm aims to add 80,000 square meters each year to achieve its target.

Particularly, Cebu will account for about 20-25 percent of the footprint expansion.

Gaisano announced the focus is to open more stores in the Visayas in the next years.

In Cebu, Balatbat said the retailer is looking at towns in the north and south and Mactan for prospect sites of its store expansion.

Balatbat said the footprint expansion in the next two years will be funded by internal generated funds and the company's P2.3-billion remaining proceeds from the initial public offering (IPO) last year. 

After that, he said the company will tap the debt market to continue the expansion.

Metro listed on the Philippine Stock Exchange in November last year, raising P3.6 billion, and it has since utilized P1.1 billion of that, Balatbat said.

Gaisano said: "We look to these exciting opportunities on the horizon, as our readiness to expand is underpinned by our strong financial performance last year."

Metro had sealed a partnership with Ayala Land for the establishment of its stores in new Ayala commercial developments: a department store and supermarket in Capitol Central in Bacolod City; a supermarket in Central Bloc in Cebu City; a supermarket in The Shops at Atria in Mandurriao, Iloilo City; and a department store and supermarket in the Ayala Malls Feliz in Pasig City.

The retail giant had also acquired the Wellworth department stores of SIAL Specialty Retailers Inc., a joint venture between Ayala Land and Store Specialists Inc.

The Gaisano-led multi-format retailer is setting aside P1.7-P2 billion in capital expenditure this year and P2-P2.5 billion for next year.

Balatbat also said the company is in constant talks with certain retail chains as part of its expansion strategy.

Currently, it has a total of 48 stores nationwide, most are in Visayas.

Last year, Metro's net profit rose 20.6 percent to P758.6 million and net sales grew 13.9 percent to P32.3 billion, while same store sales grew 8.8 percent.

Shares of Metro were traded at P3.78 per share yesterday. (FREEMAN)