Last week amid cheers and the beat of drums, Cebuano retailer Frank S. Gaisano – with his siblings Margaret, Jack and Edward by his side – rang the opening bell at the Philippine Stock Exchange (PSE) in Makati.
The traditional ceremony marked the market debut of Metro Retail Stores Group, Inc., the first for a Gaisano — an iconic name in Cebu’s retail industry — and for a Cebu-based company in almost a decade.
Gaisano said going public, which raised about P3.6 billion for Metro’s expansion, will also enable Metro to “improve margins and operating efficiency, protect our market share, and consequently create value for our investors.”
“We are ready to compete with other industry players in serving our value-conscious market and be a leading and well-admired retailer,” Gaisano said in a statement issued after the ceremony.
Metro, retail arm of Vicsal Development Corp., is the fourth largest retailer in the country, after SM, Puregold and Robinsons. It is the largest department store and hypermarket operator in the Visayas.
The company is embarking on an aggressive expansion program that will see 50 to 70 new stores in the next five years, bringing the company’s network to more than 100 stores.
This will double Metro’s footprint from the current 400,000-square meters for 46 stores, said Metro President and Chief Operating Officer Arthur Emmanuel.
“About 100,000-square meters have been secured, including stores that will open in partnership with Megaworld and Ayala. These should open in the next two years,” said Joseph Conrad M. Balatbat, investor relations head of Metro, in a press conference after the bell-ringing ceremony.
At least seven stores are slated to open next year, including one in northern Cebu and another in the south. Four other stores will serve as anchor stores of Ayala developments while one will rise at the Megaworld mixed-use complex in Iloilo.
About half of the 50 to 70 new stores that will open in the next five years will be in the Visayas while the rest will be in Luzon and Mindanao, where Metro has yet to establish its presence.
“The Visayas is our priority. We see the Visayas growing much faster than Luzon. Based on Euromonitor, retail penetration in the Philippines is only 28 percent. It’s much lower in the Visayas,” Balatbat said.
The bulk or 67 percent of the IPO proceeds will fund this aggressive expansion. The rest will be used for mergers and acquisitions.
Balatbat said they were in talks for the acquisition of more neighborhood stores that will be rebranded as Metro Fresh N Easy.
FIRST TRADING DAY
The Metro stock, with trading symbol MRSGI, opened strong at P4.30 and closed at P4.13, about 3.5 percent higher than the IPO price of P3.99.
The listing followed an initial public offering (IPO) that issued 905.4 million common shares and raised about P3.6 billion.
This milestone occurred 33 years after the first store — then called Metro Gaisano — was opened in Colon Street in Cebu City in 1982.
Before the bell-ringing ceremony, Sinulog dancers in colorful costumes performed on the trading floor and on stage as company representatives waved Metro flaglets.
Metro Retail is run by siblings Margaret, Jack, Edward and Frank. Their parents Victor and Sally, from whose names Vicsal was coined, started Metro with a store in Colon Street that had to compete with seven others in 1982.
There are currently 46 Metro stores across three retail formats — department store, supermarket and hypermarket (Super Metro) — in the Visayas and Luzon. Twenty-six of these stores are in Cebu and the Visayas.
With its listing on the PSE, Metro joined three other Cebu-based companies that have tapped the capital market: Cebu Property Ventures and Development Corp. in 1992; and Cebu Holdings, Inc. and Vivant Corp., both in 1994. Aboitiz Equity Ventures and Aboitiz Power Corp. were still based in Cebu when they went public in 1994 and 2007, respectively. Both are now based in Manila.
“This reflects our confidence in the capital markets. We believe the Philippine economy is one of the least vulnerable among the emerging economies. We continue to leverage on this positive sentiment on our economy,” Gaisano said during the press conference.
