LBC sets aggressive goal of 100 new stores a year until 2020
LBC Express Holdings, Inc. plans to open 100 stores per year until 2020, while embarking on a three-year program that will digitize its core logistics businesses.
“With the network expansion, we’re tasked to open around 100 stores every year,” LBC Express President and Chief Operating Officer Miguel Angel A. Camahort told reporters after the company’s annual shareholders’ meeting in Pasay City on Monday.
The planned store openings will bring the LBC Express network to around 1,400 this year. The company has already opened around 45 to 46 stores during the first half of 2018.
LBC Express Chief Finance Officer Enrique V. Rey said each store costs about P700,000 to P1 million each to put up.
LBC Express will also be consolidating its international affiliates, particularly those in United Kingdom, Italy, Spain, Germany, and Hong Kong, under the company.
It is the process of acquiring its overseas units to prop up its global revenue streams.
Mr. Rey said they want the affiliates to be “healthier” before being folded into LBC Express, saying that the Europe business has been “challenged.”
LBC Express’ international units currently account for less than 5% of the total business.
The store network expansion forms part of LBC Express’ digital transformation until 2020. Mr. Camahort said the company will be digitizing its operations in response to the role of technology in transforming its business processes.
“With digitization set to revolutionize the entire industry, we see another opportunity for LBC to define itself across all its business segments. Technology has literally changed every aspect of the way businesses operate, and LBC is on the move to make sure they lead the pack,” Mr. Camahort said in a speech during the annual shareholders’ meeting.
This three-year digital transformation includes three aspects, such as investments in technology, training for people to cope with the new technology, and the expansion of its store network.
“We partnered with Ramco, a huge system integrator provider for the single platform for the system requirement. We’re also invested now in handheld units for all our couriers to bring with them handheld units for ease of transaction,” Mr. Camahort said.
The Araneta-led firm has also introduced new services that facilitate transactions for online and e-commerce businesses, namely cash on pickup (COP) and cash on delivery (COD). These target small online sellers and starting entrepreneurs.
“Social sellers have been a major driver for our retail component and we feel that this will continue... we feel strategically we have to position ourselves to support these social sellers,” Mr. Camahort said.
FOLLOW-ON OFFERING
Meanwhile, LBC Express said it will resubmit with the Securities and Exchange Commission its registration statement for a follow-on offering (FOO) to reflect the financial results for the first quarter of 2018.
LBC Express encountered delays in preparing its registration statement for the FOO since its previous underwriter was forced to close shop last year.
Details of the share sale, however, remain the same, with 69 million shares priced from P13 to P22 each to be sold. Abacus Capital and Investment Corp. has been tapped as the new underwriter of the offering.
LBC Express’ net income attributable to the parent jumped 143% to P559.8 million in the first three months of 2018, as revenues picked up 12% to P2.75 billion for the period. The company expects its second quarter earnings to be “better than the first quarter.”