(Source: Manila Standard | April 27, 2018)
Puregold Price Club Inc. of retail Lucio tycoon is exiting the convenience store business, with the sale of its entire 70-percent stake in Japanese retail chaon Lawson four years after venturing into the business.
Puregold said in a disclosure to the stock exchange it accepted the offer of partner Lawson Japan to buy the 70-percent equity interest in the Philippine joint venture, PG Lawson Inc., for an undisclosed amount.
“The divestment decision will enable Puregold to rebalance its risks portfolio in the grocery retail sector and focus its resources in the further development and strengthening of the Puregold brand,” Puregold said.
Puregold at the end of 2017 had 33 Lawson stores, mostly in Metro Manila.
Puregold in 2014 teamed up with Lawson to form PG Lawson, which had aimed to build and operate a chain of convenience stores across the Philippines totaling 500 stores by 2020.
Puregold subscribed to 3.5 million common shares in PG Lawson for a total investment of P350 million, while Lawson bought 1.5 million common shares worth P150 million.
Puregold in 2017 subscribed to an additional 1.4 million common shares for P140 million.
Puregold earlier said it would spend P3.7 billion in capital expenditures this year for the construction of new grocery stores, IT system upgrade and maintenance.
Funding for this year’s capital expenditures will primarily come from internally generated cash and short-term loans, if necessary.
Puregold in 2017 posted a 5.7-percent increase in net income to P5.84 billion from P5.53 billion recorded a year ago on double-digit growth in sales.
Consolidated net sales increased 10.6 percent to P124.5 billion in 2017, slightly exceeding the full-year goal of between 8 percent and 10 percent.
Puregold at the end of 2017 operated 372 stores with 518,000 square meters of net selling area.
Puregold expects net sales this year to rise at a slower pace of 6 percent to 8 percent, and flat gross and net profit margins.
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