Puregold earmarks P5.5b for 2015

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(Source: Manila Standard Today | By Jenniffer B. Austria | Dec. 07, 2014 )

Puregold Price Club Inc. of retail tycoon Lucio Co is spending P5.5 billion for 2015 to finance store expansion and possible acquisitions.

Puregold president Leonardo Dayao said the company would invest P5.5 billion to put up 25 Puregold stores, P1.5 billion to build two S&R stores and another P1.5 billion for acquisitions.

Dayao said Puregold was in good position for growth, being the only retail company focused on the lower income segment of the market and the sole chain focusing on sari-sari stores.

Puregold’s S&R, meanwhile, is the only membership shopping store in the country.

“So we are very optimistic over the prospects of the company next year,” Dayao said.

Dayao said aside from expanding the Puregold format, the company was also accelerating the expansion of S&R stores by putting up two outlets over the next five years. One S&R store costs between P500 million and P700 million to build. Most of the new S&R stores are located in Visayas and Mindanao.

Dayao said the company was scouting for a possible site in Visayas, either in Bacolod or Iloilo, and another in Southern Luzon, either in Batangas or Laguna, for the S&R expansion next year.

The company remains open for acquisitions to accelerate store expansion. Puregold has acquired 40 stores in the past two years.

Puregold this year would have opened 28 outlets to end 2014 with over than 230 stores.

Puregold’s plan to buy the duty-free shops of the Co family in Clark and Subic, meanwhile, has been delayed to the middle of next year.

Dayao said the company would no longer be able to finalize the agreement before the end of the year, the original target date for completion.

He said while valuations were completed, the company was still finalizing some details. The deal is to be completed through a combination of cash payment and share swap.

The consolidation of Puregold Duty Free Clark and Puregold Duty Free Subic under Puregold will give the supermarket chain “full assortment and variety of formats to ensure customer satisfaction.”

The two duty-free stores are the remaining supermarket shops owned by the Co family that are not yet consolidated under Puregold.

The company said the consolidation of the two duty-free stores, which generate P200 million in sales monthly, would significantly contribute to Puregold’s earnings.