MANILA, Philippines – Grocery chain Puregold Price Club Inc. has created a new subsidiary to jumpstart its venture into food-retailing.
In a regulatory filing, Puregold said it has formed Estenso Equities Inc. that will “house investments of Puregold to other food-retail related activities.”
“Estenso Equities is just a shelf-ready subsidiary of Puregold for possible future joint ventures with third parties in food-related retail business,” Jimmy F. P. Perez, investor relationas officer of Puregold, said in a text message.
Late in May, Puregold’s parent firm Cosco Capital Inc. raised P16.8 billion in fresh capital from the sale of existing and new shares to investors.
Of the proceeds, 50 percent will be used to expand the selling area of Puregold-anchored commercial real estate properties and increase the oil and petroleum storage of Pure Petroleum.
Around 20 percent is allotted for the acquisition of non-food retail businesses like hardware and pharmacies. Another 20 percent was allocated for debt payments and the remaining 10 percent to improve its distribution network.
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In the first quarter, Puregold more than doubled its earnings to P962 million from P469 million a year ago on the back of new stores and stronger sales.
The growth was supported by P16.09 billion in consolidated net sales, up almost half from P10.74 billion last year.
Puregold also opened nine new stores out of the initial target of 25 new branches for the entire 2013. Of the new stores, five were hypermarkets and four were supermarkets located in Southern Luzon, Northern Luzon and Metro Manila.
Puregold targets to grow its consolidated net sales by 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.