SM plans to list retail business

Conglomerate SM Investments Corp. (SMIC) is eyeing an initial public offering for its retail business to seize the benefits of public listing. “It is an option…there is incremental value awaiting to be tapped by SMIC. Once we list SM retail, it will push up the value and it will be the biggest retail group with the widest variety. You cannot find this variety in any one group even in Southeast Asia,” said Jose Sio, executive vice president and CFO of SMIC.

Last July, the SM Group obtained the green light from the Securities and Exchange Commission (SEC) to merge its specialty stores into SM Retail Inc., the company in charge of the Sy family’s retail operations.

SMIC investor relations consultant Timothy Daniels said the merger is seen to “create value and boost earnings given the strong competitive position of the specialty stores and their synergies with SM malls.”

Over 1,300 retail outlets were folded into SM Retail in exchange for shares of stock in the company’s retail unit.

Among the brands that were merged with SM Retail’s food and department stores are leading household brands in SM stores such as Ace Hardware, Watsons, Toy Kingdom, SM Appliances, Our Home, Baby Company, Kultura, Sports Central Pet Express and other specialty retailers.

The combined entity will have 1,927 outlets and 2.4 million sqm of gross floor area across a diverse portfolio that serve a wide range of consumer needs.

SMIC now owns 77.3 percent of the enlarged SM Retail Inc., which registered revenues of P253 billion last year.

As of the end of the first half, SM Retail had a total of 328 stores, comprising 55 SM Stores, 47 SM Supermarkets, 45 SM Hypermarkets, 147 Savemore stores and 34 WalterMart stores.