Japanese convenience store chain FamilyMart Co. has decided to change its Philippine partner to a major gas station operator in a bid to expand its diminishing network of outlets in the Southeast Asian country by focusing on provincial areas.
The Japanese firm signed a memorandum of understanding on an area franchise license agreement last week with Phoenix Petroleum Philippines Inc., which runs over 500 gas stations nationwide.
It has decided to scrap its current partnership with two local firms. Its joint venture with them was operating 68 FamilyMart stores mainly in greater Manila as of the end of September.
FamilyMart "had so far built up a store network in and around the capital with our current partners. But we will aim to open more outlets in regional areas (by teaming up with Phoenix)," a FamilyMart spokesman told NNA.
The Japanese company will switch partners in the joint venture, Philippine FamilyMart CVS Inc., to Phoenix from the conglomerate Ayala Corp. group and wholesaler/retailer Rustan's group with which it has cooperated since 2012. FamilyMart is scheduled to sign a license contract with Phoenix by the end of January.
The joint venture had scaled down the number of stores in pursuit of profitability after expanding its network to a peak of 120 outlets by the end of 2015, the Tokyo-based firm said.
Phoenix, which has gained mass market knowledge through gas station operations across the country, "will take the initiative for the store expansion strategy and product lineup improvement," said the spokesman.
FamilyMart expects the new local partner to be able to increase stores faster than before, aiming to increase the number of outlets to 300 in the next five years, he added.
Currently, Philippine FamilyMart is 60 percent owned by SIAL CVS Retailers Inc., an equally owned joint venture between the group arms of Ayala and Rustan's, with 37.6 percent funded by FamilyMart and 2.4 percent by Japanese trading house Itochu Corp. (NNA/Kyodo)