Puregold moves closer to consolidating grocery business

MANILA, Philippines - Grocery chain Puregold Price Club Inc. is moving closer to consolidating its grocery business under one company.

In a disclosure, Puregold said it has secured the Securities and Exchange Commission’s approval for the merger of Puregold Price Club Inc., Puregold Junior Supermarket Inc., S-CV Corp. and Gant Group of Companies Inc.

Specifically, Puregold Price Club will absorb the three companies, which operate under the business names Parco Supermarket, Parco Selections Supermarket, Parco Pharmacy and Parco Drugstore, Lynxserve Corp. and Super Retail XV Corp.

The move formalizes the consolidation of Parco in the company.

In May, Puregold bought a 100-percent stake in Gant Group, the owner and operator of the Parco supermarket chain that has 12 stores in Metro Manila, three in Bulacan and four stores in Rizal province.

Meanwhile, Puregold reported that a global fund manager has secured a minority stake in the company.

“As of Feb. 27, Smallcap World Fund Inc., a company incorporated in the US, holds 140.84 million shares or 5.09 percent of Puregold,” the company said.

Smallcap World said its acquisition between July 2012 and February 2013 at an average price of P29.01 apiece was for investment purpose only.

Smallcap World is a mutual fund of The Capital Group Companies Inc. focusing on small-cap companies with market capitalizations of $3.5 billion or less. It is co-managed by Capital Research and Management Co., Capital World Investors and Capital Research Global Investors.

Puregold, for its part, targets to grow its consolidated net sales 30 percent to roughly P75 billion this year from P57.5 billion in 2012.

It intends to spend P3 billion this year to support its growth through new stores and continuous acquisition.

Profits of the grocery chain surged 75.9 percent to P2.718 billion last year as consolidated net sales jumped 47.4 percent to P57.467 billion.

Puregold ended last year with 156 stores in operations, composed of 131 Puregold Hypermarkets, Supermarkets and Extras; 19 Parco Supermarkets; and six S&R warehouse membership shopping clubs. As of end-2012, Puregold had 77 stores in Metro Manila, 45 in Southern Luzon, 33 in Northern Luzon and one in the Visayas.

This year, Puregold is branching out in Mindanao with the opening of its flagship store in Cagayan de Oro and an S&R Membership Club in Davao as part of plans to hit its 200-outlet target ahead of the 2015 schedule.