Retail exits seen driven by consolidation, valuation concerns

By Alexandria Grace C. Magno, Reporter

RECENT retailer delisting plans, store closures, and brand exits reflect consolidation and valuation concerns rather than a broad downturn in the Philippine retail sector, analysts said.

“The recent announcements involving retailer delistings, store closures, and brand exits should be viewed within the broader context of industry consolidation rather than as evidence of a widespread retail downturn,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

He said delistings should also be viewed against a stock market marked by limited liquidity, low investor participation, and share prices that may not fully reflect companies’ underlying value.

“Some controlling shareholders may simply conclude that the benefits of remaining publicly listed no longer justify the associated costs and obligations,” Mr. Arce said.

He added that such developments often reflect capital market conditions as much as the underlying health of retail companies.

In a separate Viber message, Unicapital Securities Equity Research Analyst Jeri R. Alfonso said recent delisting plans by retailers appear to be driven more by valuation concerns than by recent increases in oil prices.

“We’ve seen retailers such as RRHI and MM announce plans to delist, but these stocks have arguably been underappreciated by the market for years,” she said, referring to the Philippine Stock Exchange (PSE) ticker symbols of Robinsons Retail Holdings, Inc. and MerryMart Consumer Corp.

“Their decision is likely less about the recent spike in oil prices and more about a long-standing disconnect between their intrinsic value and their market valuation,” Ms. Alfonso added.

She said companies may consider delisting when management believes the market is consistently undervaluing the business.

“At that point, the costs and obligations associated with being listed, including regulatory compliance, disclosure requirements, and administrative burdens, may no longer be justified, making delisting a more attractive option,” Ms. Alfonso said.

Robinsons Retail is scheduled to exit the bourse on July 28, while MerryMart is undergoing a voluntary delisting after DoubleDragon Corp. moved to fully absorb the retailer.

Meanwhile, Mr. Arce said store closures and brand withdrawals reflect a more competitive retail environment, with rising operating costs, shifting consumer preferences, digital disruption, and competition posing challenges for some operators.

“Brands that fail to adapt their product offerings, pricing strategies, and customer engagement models may struggle to remain viable, while stronger retailers can capitalize on market exits by gaining market share, securing more favorable lease arrangements, and expanding into vacated locations,” he said.

Mr. Arce said continued interest from international brands entering and reentering the Philippine market indicates that confidence in the country’s consumer sector remains intact.

Recent developments involving brands under listed retailers illustrate these shifting dynamics.

In February, Stores Specialists, Inc. (SSI), a wholly owned subsidiary of SSI Group, Inc., said it would stop operating Marks & Spencer stores in the Philippines, with all branches closing by May 2.

Earlier this month, Marks & Spencer said it would return to the country through a franchise agreement with Indonesian retail group PT Mitra Adiperkasa Tbk. (MAP), which will take over local operations and reopen the brand later this year, starting with a store at Glorietta in Makati City.

Meanwhile, Robinsons Retail said it will close all 11 standalone No Brand stores in the Philippines by the end of June 2026, citing changing consumer preferences.

No Brand entered the Philippine market in 2019 through a master franchise agreement between Robinsons Retail and South Korea’s Emart.