SSI GROUP, Inc. will be merging two of its wholly owned units to improve operational efficiencies within the company.
In a disclosure to the stock exchange on Monday, the Tantoco-led firm said its board of directors has approved the merger of Luxury Concepts, Inc. and Casual Clothing Retailers, Inc. (CCRI).
CCRI will be the surviving entity after the merger, which will be subjected to the approval of the Securities and Exchange Commission.
“The merger is being undertaken in order to streamline SSI’s corporate structure and is expected to result in increased efficiencies,” the company said.
SSI noted that the merger will not affect the day-to-day operations of both firms.
The listed firm is currently undertaking a rationalization program that seeks to improve the overall sales quality and operating efficiency of its store network.
International luxury brands under SSI’s portfolio include Hermes, Gucci, Salvatore Ferragamo, Givenchy, Jimmy Choo, Michael Kors, Prada, Ralph Lauren, and Kate Spade.
It also distributes clothing brands such as Lacoste, Zara, Old Navy, Gap and Banana Republic.
SSI dropped 70 stores in 2017, ending the year with a total of 638 stores covering 129,486 square meters. It also gave up eight brands during the period, while adding Estee Lauder and Good Eats, for a total of 108 brands in its portfolio, from 114 brands in 2016.
The company also exited the convenience store business last year, selling its stake in Philippine FamilyMart CVS, Inc. to focus on its core specialty retailing business.
The rationalization program allowed SSI to book a net income of P275 million in 2017, 19% higher than the P232 million it generated in 2016, and a reversal of the 71% profit decline it saw in 2016.
Net sales, meanwhile, were flat at P18.5 billion for the period, which the company said it still better than expected with the presence of a highly competitive environment, the weakening peso against the dollar, and the 6.7% decrease in the company’s total selling area.
This serves as the company’s response to the impacts of e-commerce on traditional retailers, as shown by recent store closures and bankruptcy filings by major retailers in the United States.
Shares in SSI went down by a centavo or 0.39% to close at P2.58 each at the Philippine Stock Exchange on Monday. — Arra B. Francia