Robinsons Retail doubles spending to P7B this year

MANILA, Philippines - The multi-format retail chain of the Gokongwei family is more than doubling its capital spending this year to P7 billion to fasttrack the company’s organic expansion and support acquisitions.

Robinsons Retail Holdings Inc. will take advantage of the under-penetrated Philippine retail market backed by robust economic growth, its top official said.

“For 2014, Robinsons Retail will more than double the number of stores that were opened last year. We will be spending an estimated P7 billion on capital expenditures to fund our aggressive nationwide expansion,” said company president and chief operating officer Robina Gokongwei-Pe.

Robinsons Retail spent P2.1 billion in 2012 and P2.8 billion in 2013 for its expansion program. In the first quarter, the retail giant invested more than P900 million for its expansion program.

Robinsons Retail targets to end the year with 1,400 stores, increase floor space by mid to high-teens and improve gross margin by 40 basis points, Gokongwei-Pe said.

As of end-March, the retail group had 1,145 stores nationwide. Robinsons Retail is the company behind Robinsons Supermarket, Robinsons Department Store, Ministop, Daiso Japan, South Star Drug, Robinsons Appliances, Toys “R” Us, Saizen, Shiseido and a selection of international fashion apparel like Topman, Topshop and Dorothy Perkins.

“As a continuing exercise, we will be on the lookout for possible acquisitions and expansion into other retail segments and pursue franchise deals with new global brands,” Gokongwei-Pe said.

Since completing its $621.8-million initial public offering in November, Robinsons Retail has acquired five retail firms: the six-store EZ Supermarket chain, the three-store Jaynith’s supermarket, eight Shiseido outlets, two Benefit cosmetics stores and A.M. Builders’ Depot.

Fresh sales contribution from new stores and higher revenues from existing branches allowed the retail chain to record higher earnings in the first quarter.

Robinsons Retail’s core net earnings, which excludes equitized income from Robinsons Bank and interest income, rose 15.2 percent to P530 million in the first three months of the year. Net income including equitized earnings of Robinsons Bank rose 2.4 percent to P643 million from a year ago.

Consolidated net sales picked up 16.1 percent to P17.4 billion in the first quarter from P15 billion.