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Family fortunes

Article - June 4, 2012
SM Investments Corp's influence on Philippine society and economy is unique, and its dedication to CSR, families and freedom of choice mirror the mindset of the nation
In 1972, Chinese-Filipino entrepreneur Henry Sy asked his then 22-year-old daughter Teresita to open his first department store in Manila. With typical modesty she recalls: “He asked if I could handle it, and I said ‘yes’. You don’t know how to be scared when young.” Now the richest man in the country, with a net worth estimated by Forbes at $8 billion, Mr Sy is credited with creating Philippine “malling culture”: on average, three million Filipinos visit his 42 malls each day.

Starting out with a simple shoe store called Shoemart (called SM for short), Mr Sy transformed it into a fully air-conditioned department store. From there, he expanded into developing shopping malls with the intention of making luxury and quality accessible to more people and making shopping in the Philippines fun.

Now in his late 80s, Mr Sy is Chairman of SM Investments Corp (SMIC) – a conglomerate that besides malls and retail is also active in property, banking, hotels and conventions – but leaves day-to-day operations to his six children.

Today, SM Retail consists of 176 stores. It had net income of P1.1 billion (£16 million) in the first quarter of 2012, up 20 per cent from the same period last year.

“The company grew because of good communications and internal harmony.”

Teresita Sy-Coson,
Vice-Chairman of
SM Investments Corporation

SM Prime Holdings is the SMIC arm in charge of mall operations. While SM’s dozens of shopping centres are the clear leader in the country, they have also become an integral part of life for many. “There are some intangible things beside the merchandise that we similarly offer. We create a feeling of the mall just being like a second home. It is the centre where their lives revolve around, whether they have events, solitary moments or times with the family, and this is where they can always come to us,” says Teresita Sy-Coson, former President of the SM Department Stores unit and current Vice Chairperson of SMIC.       

In the mid 1990s Ms Sy-Coson – described recently by Forbes Asia magazine as one of the most influential women in Asia – turned her attention to the family’s retail and savings bank, the fledgling Banco de Oro. She approached the business as she would a department store, making efficiency and the needs of the consumer paramount. She introduced longer banking hours, Saturday opening and new products and services.

Banking delivers most to the SMIC’s profits, with a 32.3 per cent contribution in the first quarter of 2012. Retail came a close second with 26.7 per cent, followed by shopping malls and real estate, 25.3 per cent and 15.7 per cent, respectively.  Meanwhile, net income grew by 13 per cent to P6 billion in Q1 2012, compared to Q1 2011’s P5.3 billion.

Growth is business as usual with SMIC, and the Sy family attributes it to the good business heads that work in each area. Ms Sy-Coson says, “The company grew because of good communications and internal harmony. These factors, combined with the basic tenet that we stick to what we know, will continue to drive growth.”

This past March, the corporation won The Asset Platinum Award for excellence in management, financial performance, corporate government, social responsibility and investor relations.

Ms Sy-Coson underlines her family company’s paramount commitment to corporate social responsibility: “We like to become directly involved in the lives of our people. Our CSR programmes focus on education and health.”

She also underlines the importance of human resources. “We choose our people well. It is about gelling personalities. Philippine demography is different. We may look like Malaysians or Indonesians, but we are a Catholic country, we are a bit Latin, and we also have the Chinese influence…”

In short: “We are unique in the way we think.”