THE ax may have fallen on Wall Street in 2008, but not on Philippine retail, if you ask local retail executives.
If you’re among those who parked their plastic cards and steered clear of the malls and department stores following the global financial crisis, you would probably be scratching your head as retailers claim they didn’t feel the pinch. Not at all, they say. In fact they posted growth—double-digit growths —in ’08.
Retail giant SM Shoemart, according to Jorge Mendiola, senior vice president for retail, registered double-digit growth in sales in “October and November, which were the months when the crisis unfolded in a big way.”
The scene seems to have been the same in the local luxury market. “Our sales have been rolling over the past couple of months since this thing started,” Anton Huang said in an interview in early November. Huang is executive vice president of Stores Specialists Inc. (SSI) and its mother company, Rustan Group of Companies.
SSI distributes global luxury labels such as Prada, Gucci, Burberry, Tod’s, Salvatore Ferragamo, as well as mid-market brands like Zara, Marks & Spencer and Lacoste.
The two years following the recession in 1997, Huang recalled having had the “best years” for SSI. “We’re hoping that will remain the case… This one is much bigger than that and we’re aware of that. We’re banking on the fact that the local luxury market will be traveling less and shopping more here.”
Rustan’s posted a 13 percent growth in sales in the months of September and October, “ever since the changes,” Huang said referring to an internal reorganization in the family-owned company. Huang’s mother, Zenaida Tantoco, took over.
“When we speak of crisis, however, we think that it is two other crises—the rice shortage and the fuel crises—that had more impact on the Philippines,” said Mendiola. “With the rice shortage addressed and fuel prices lower, these have more or less been contained.”
In what seems to be an unorthodox move in times of crises, SM and SSI are expanding and opening more—and grander— stores in a big way.
Last month, SM unveiled the extension of its mall in North Edsa, now the world’s third biggest mall. (The country has three of the world’s biggest malls, all of them an SM.)
Early this year, SSI brought in iconic American brands Gap and Banana Republic. Next year, it will open stores for mid-market apparel brands like Massimo Dutti and Singapore’s Raoul in Greenbelt 5, and the French accessories label called Agatha. More important, it will launch the stores of Jimmy Choo and Hermes in Greenbelt 4.
Optimistic, too
It has also been an optimistic time at Crossings Department Stores, another family-owned enterprise.
“November sales [were] up, both in home and apparel sections,” said general manager Xandra Ramos-Padilla. “People are shopping locally. We’re in a very good position to address the needs of people in these economically trying times.”
Like other retailers here and abroad, Crossings held holiday sales to lure customers, understanding that no matter the economic situation, the Filipino wouldn’t cut down his or her Christmas list.
Ramos-Padilla said, “I can’t speak for the rest. But in the US, it’s the luxury market that’s suffering.”
That depends on who you ask, of course. According to Huang, “It’s a mixed bag. In the US, the mid-priced brands are suffering. If you talk to the luxury brands, they’re not seeing double-digit [growths] but they’re still growing. It’s not that they’re unaffected. They are, but not negative figures like the other [mid-market] brands.”
However, Ruby Gan of the boutiques Myth and Schu, said, “The high that we feel right now is artificial because of the holiday shopping. I expect a very slow first quarter of 2009.” Sales picked up in November, she admitted, but this may only be prompted by the holiday buying mood.
Her sentiment was echoed by Myth partner and fashion designer Randy Ortiz, who grimaced when asked in early December how sales was in the upscale Greenbelt 5.
But they’re not deterred. “We just have to patient and be pro-active,” Gan said. “Life doesn’t stop just because things have gone bad. We just have to learn to ride the waves.”
At Rustan’s, Huang said skincare and personal care brands have been selling particularly well, perhaps proving that if a woman can’t buy the Chanel bag, she would settle for the lipstick. Or maybe the face cream or the sunglasses.
“Whether in good or bad times, we try to give our customers an exciting one-stop shopping experience through our store in interiors, wide assortment of merchandise, and value-for-money proposition,” Mendiola said.
With a report from Alex Y. Vergara
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