Nedy Tantoco: The queen of luxury retailing

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No one has done premium retailing with such grounding in tradition, boundless energy, intuitive grace, and effortless style than Zenaida Rustica “Nedy” Tantoco, the undisputed queen of Philippine luxury retailing.

Over the years, the Tantoco family’s SSI Group Inc. has assembled a formidable portfolio of international luxury brands to cater both to the aspirational and elites of this country.

No other group or company has a larger hoard or supply of specialty and luxury brands in terms of size, number, and store footprint.

SSI Group traces its retail magic DNA to Rustan’s (from Rustia and Tantoco) the department store founded by Gliceria Rustia Tantoco and her husband, the former Ambassador Bienvenido Tantoco Sr. now 96.   Their travels gave them the idea to establish the first Rustan’s on San Marcelino in Manila 65 years ago.

Daughter Nedy Tantoco carries the exceptional retailing DNA today as the CEO of Rustan’s and SSI Group.

Rustan’s stores are distinguished for the quality of product offering, the quality of service, and the focus on customer satisfaction.

Writes Philstar lifestyle writer Millet M. Mananquil: “Rustan’s pioneered in a lot of firsts in the retail industry, creating for itself a niche market—finicky customers who want quality and good service. Perhaps only Rustan’s will assist you from the time you buy a product till you get into your car. Rustan’s was the first to encourage customers to touch and appreciate their merchandise. The first to offer free gift wrapping, a bridal registry, a shopping reward card, among others. It was the first to start a Filipino designer brand (Larrie Silva), and the first to open a Filipiniana department encouraging shoppers to buy “Our Very Own”. Rustan’s was the first to specialize in really good service and offer personal shoppers for clients.”

As of Dec. 31, 2016, SSI’s retail network had 708 stores with combined space of 13.8 hectares, inside or near 82 major malls across the archipelago.

SSI was established in 1987, making it the pioneer in introducing globally recognized brands through specialty store retailing to the Philippine market.  It went public in November 2014, generating P7 billion in equity capital to fund its aggressive expansion.

The Tantoco family also owns luxury store Adora and in the Philippines holds the franchise for high quality beverage and food selections, Starbucks of USA, TWG, and SaladStop! of Singapore; and since 2013, a joint venture convenience stores under the “FamilyMart” franchise for round-the-clock, everyday convenience shopping for quality essentials.  FamilyMart is being sold to Dennis Uy. In real estate, the family has Sta. Elena Golf & Estate.

The Group’s store network also includes e-commerce properties payless.ph, lacoste.com.ph, beautybar.com.ph, 158db.com.ph and ssilife.com.ph.

The SSI group’s must-have products are the world’s largest and the most coveted brands in their market segments.

The marquee brands include Hermès, Gucci and Salvatore Ferragamo for premium luxury apparel and accessories, Zara, Bershka, Stradivarius, Pull and Bear, and Old Navy for popular fast fashion, Lacoste and GAP for casual wear, Samsonite for stylish travel and luggage offerings, Payless ShoeSource for value trendy footwear, and MUJI and Pottery Barn for modern home furnishings and accessories.

In the whole year of 2016, SSI Group reported revenues of P18.4 billion, an 80.6 percent jump from the P10.18 billion registered six years ago, in 2011.

That implies average sales growth of 13.4 percent per year, remarkable given that the Philippine population grows at just 1.8 percent per year, the same rate of growth of the Filipino middle class.  Between 2011 and 2016, the domestic economy grew by 6.1 percent. So SSI Group’s yearly sales are growing at more than twice the growth rate of the economy.

The Filipino has become middle class, with per capita income exceeding $3,500.  The savings rate is high, at 30 percent of GDP, or about P4.8 trillion ($94 billion).  Much of that, along with $27 billion (P1.377 trillion) in annual remittances of 12 million Filipino expats, goes to consumption.

In the five years from 2011 to 2016, the swell in profits was breathtaking, by 206 percent, from P264 million in 2011 to a record P810.7 million in 2015, yielding average net income growth per year of 41.2 percent.  In 2016, however, income fell dramatically, to P231.6 million, from the high of P810.7 million.

Gross profit margin fell slightly to a still eye-popping 49.6 percent in 2016 from 53.5 percent in 2015, reflecting greater discounting and promotions to ward off increasing competition.   Still, how many businesses have an astonishing profit margin of 50 percent?  Not even real estate can produce that.

The SSI Group’s market capitalization is still up 70 percent or P4.8 billion, from P6.85 billion in March 2017 to P12 billion by early November 2017.

SSI Group reported P274-million net income in the first half of 2017, up 14 percent from the first half of 2016.  Core recurring income for the period, which excludes one-time write-offs related to the Group’s store rationalization program, was at P327 million, a 13 percent y-o-y increase. 

Revenues for 2017 first half were P8.4 billion, indicating full whole sales of P17 billion.  The Group operated 665 stores covering more than 133,000 sq.m. at end-June 2017.

“Our first half results reflect resilient consumer demand as well as the execution of strategies intended to increase operating margins, maximize the efficiency of our store network and strengthen our brand portfolio. We are pleased with the progress we have made so far and expect to continue to benefit from these factors during the second half of the year,” says Anthony T. Huang, SSI Group Inc. president.  

Anton remembers a basic tenet her Lola Glecy had always emphasized: “More then anything else, a strong work ethic and the value we give our customers and partners.”

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