Wave sells 10% to Mall Group
SET-listed Wave Entertainment Plc, operator of the Jeffer steak chain and the language learning centre Wall Street English, sold a 10% stake last week to The Mall Group, the country’s second-largest retail group.
Matthew Kichodhan, chief executive at Wave Entertainment Plc, said the company’s shareholders approved the sale to the Mall Group for 179.98 million baht on Thursday. Proceeds will be used largely to repay debts and as working capital.
This is the first time The Mall Group has invested in a listed restaurant, an event organiser and an Englishlanguage learning company.
The Mall Group’s investment in Wave Entertainment is likely a part of the group’s strategic plan to expand into the food and restaurant business.
Major retail players such as Central Group, Siam Piwat Co (the operator of Siam Center and Siam Discovery) and MBK have their own fashion and restaurant arms.
Supaluck Umpujh, the Mall Group’s chairwoman, said earlier that the group was looking for partnerships in various areas to secure sustainable business growth.
The Mall Group operates about 10 shopping centres, with sales of 50 billion baht last year.
Sales of the food business totalled 19.8 billion baht last year, with Gourmet Market, the premium grocery store chain, contributing 11.8 billion baht.
The group expects food sales this year to hit 20.4 billion baht, with sales from Gourmet Market making up 12 billion baht.
Wave Entertainment operates three distinct businesses: Jeffer steak restaurants, event organising t hrough I ndex Creative Village Plc and language learning centre Wall Street English.
Wave reported consolidated revenue of 2.49 billion baht in 2017, down from 3.13 billion baht in 2016, and posted a net loss of 268.32 million baht last year against a net profit of 56.98 million baht in 2016.
“With The Mall Group as one of our shareholders, we hope to enjoy business synergy, particularly in terms of locations, raw material sourcing, human resources and working capital support,” Mr Matthew said.
More importantly, as the owner of Index Creative Village, the country’s largest creative events organiser, The Mall can rely on Index Creative Village to handle its events, marketing and activities.
Mr Matthew said that as Wave Entertainment aggressively expands into food and English-language schools, the company needs location support.
Nonetheless, The Mall Group has not sent any executives to sit on the company’s board or manage the business.
With greater financial liquidity, Mr Matthew said the company will continue expanding its food business this year but shift its business model to become a franchise.
The company operates 77 Jeffer steak restaurants across the country.
“There is a huge opportunity to expand food business in Thailand,” Mr Matthew said. “The increase in middle-income people will increase the opportunity for our steak business. MK Restaurant and KFC each operate 500 restaurants. Why can’t our steak restaurants jump to 200 branches in the next five years?”