Gucci forms joint venture with SSI

The Tantoco-led SSI Group Inc. on Wednesday said it has signed a deal with Gucci’s G Distribution B.V. to form a joint venture company that will accelerate the growth of the Italian luxury goods manufacturer in the Philippines.

In its disclosure, SSI’s wholly-owned unit Stores Specialists Inc. will form a company with Gucci which it will call Luxury Goods Philippines Inc. (LGPI).

The board of SSI approved the execution of the joint venture agreement on May 17, the company said.

SSI is already operating a flagship Gucci store in Makati, but the company said the deal “further strengthens” the cooperation between Gucci and SSI.

The company said it “is expected to further accelerate the growth of the Gucci brand in the Philippines and enable operating efficiencies, as Gucci and SSI transition from a franchisor-franchisee relationship, to joint venture partners.”

Luxury Goods will have an initial capital of P350 million, with SSI owning 25 percent of the company and Gucci owning the remaining 75 percent.

“LGPI is expected to commence operations on June 1, 2022, and shall own and operate Gucci stores in the Philippines,” the company said.

For the first three months of the year, SSI said its income reached P67.7 million, a reversal of last year’s P99.49-million loss.

Sales rose to P4.49 billion for the period, a 28-percent growth from last year’s P3.52 billion, as the group continued to see a recovery from the pandemic. Sales and foot traffic picked up in February and March after the peak of infections in January.

“Despite challenging operating conditions related to the Covid pandemic during the first three quarters of the year, during the fourth quarter, with Covid cases relatively controlled, the Group capitalized on strategies put in place to ensure responsiveness to changing market conditions, and converted improving consumer confidence and mobility into sales and profitability.

Apart from a return to profitability, the Group saw extremely strong cash flow generation in 2021,” Anthony T. Huang, the company’s president, said.

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