AllDay Mart has 58 stores but half are 'dark'

Bilyonaryo reported that Abacus Securities has revealed that AllDay Mart [ALLDY 0.80 pre-IPO], the Villar Family's grocery store chain that is set for a November 3rd IPO, has 25 “dark stores” over and above the 33 actual ALLDY locations. Abacus mentioned that these stores are intended to support ALLDY’s online sales channel, which accounts for almost 5% of ALLDY’s total sales.

The dark locations are not open to the public but are actually better thought of as private warehouses that are intended to serve a particular geographic area. Dark locations are able to remain “open” 24/7 to facilitate deliveries.

In the article, Abacus also said that it believes ALLDY will not have a problem reaching its store location goal of 100 by 2025, considering that it is already at 33 and that “[ALLDY] was present in only 25 of the 147 cities and municipalities where Villar’s subdivision projects were present”.

MB BOTTOM-LINE

Seems like the Villars are calling a few plays from the Injap Sia playbook -- for better and for worse (more on the “worse” in a second)!! While ALLDY built its first store years before MerryMart [MM 3.64 2.93%], it was Injap that pioneered the use of “dark” warehouse locations to cheaply extend his grocery store’s online footprint. Looks like ALLDY is serious about growing its online footprint, but I would hesitate to consider any of these “dark” locations to be anything like an actual physical location in any way.

The Bilyo/Abacus report didn’t do that, nor did it even imply it, but I just want to put it out there that calling these “dark stores” dresses the idea in a lot of mental clothing that is not appropriate. Dark stores are just warehouses, and sometimes the placement of the goods inside the warehouse is not even visually distinct from the surrounding product for other companies. Sometimes these warehouses are more sophisticated, stand-alone logistics centers, but oftentimes they are just as I’ve described above: rented space in a convenient warehouse location.

Now that that is out of the way, let’s get to the “worse” part. Remember back before MM IPO’d, when the PSE specifically asked MM to more visibly notify potential investors that Injap Sia had sold himself 6 billion MM shares at P0.05/share? Yeah, well a little footnote in the ALLDY prospectus reveals that the Villars are pulling the same stunt. Perhaps less audaciously, but still: the same stunt. The note says that on June 25, 2021, ALLDY “issued 2,615,000,000 shares at a par value of Php0.10 per share to AllValue, and payment was made in cash.” That’s 10% of the post-IPO company, worth P2.1 billion at the offer price, for just P261 million. That’s a 704% profit in just 131 days.

Sure, Injap’s profit was much much higher (1,880%), but the tactic is basically the same. Will the PSE publicly expose the Villars’ move with ALLDY as they did for Injap and MM, and will they require the Villars to disclose this purchase as a pre-condition to conducting the IPO? It’s possible that there is some aspect of this transaction that I’m not seeing that makes it not at all comparable to the Injap/MM one, but from what I see, it seems like the exact same move.

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