BIZ BUZZ: SM adds Landers to shopping cart
The SM group may have built the biggest retail empire in the country, but there are still certain pockets in the retailing space that it has yet to claim as its stomping ground.
That may change soon—and we mean very soon.
One new frontier targeted by the Sy family-led conglomerate is membership shopping, currently the turf of Puregold Price Club founder Lucio Co via S&R.
Reliable industry sources intimated to Biz Buzz that SM and private equity firm CVC Capital Partners are currently in the thick of discussions on the buyout of the latter’s stake in Southeast Asia Retail Inc., operator of Landers Superstore.
CVC, which came in as a strategic partner of Landers founder Lowell Yu by subscribing to a convertible bond in 2021, is ready to exit after five years. And after knocking on many doors, it seems that SM group sees value in picking up the IOU.
Our sources estimate that the convertible bond gives an equivalent 49-percent economic interest. Including interest, SM is estimated to shell out almost $200 million to gain a foothold in Landers.
If and when finalized, the deal could give the SM group a backdoor entry to membership shopping and extend a lifeline to Landers, a once high-flying challenger.
With SM emerging as its new white knight, the struggling Landers is seen to stabilize its position, accelerate its expansion and heat up competition in the membership shopping arena. To date, Landers’ footprint is still less than half of S&R’s 33-store network.
For its part, Landers caught SM’s interest because it’s in line with the “premiumization” strategy of the Sy family. While it’s still lording over the mass market, it apparently wants to cater to every consumer segment in an economy that has finally reached the so-called upper-middle income country status this year.
It’s SM just saying, “We’ve got it all for you.”
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