PETALING JAYA: Hong Kong-based DFI Retail Group (DFI) is selling its food retail businesses, including the iconic Cold Storage and Giant supermarket chains in Malaysia to a local retail group led by businessman Andrew Lim.
Lim is the executive chairman of Gama Group and deputy chairman of Sogo department stores in Malaysia. Gama Group owns and operates the Gama supermarket and departmental store in Penang.
DFI, via its subsidiary GCH Retail (Malaysia) Sdn Bhd, entered Malaysia in 1999 by acquiring a 90% stake in the Giant business, then operated by the Teng family. At the time, there were five supermarkets and two hypermarkets.
In a statement today, DFI said the new owners will take on the 2,500 Giant, Cold Storage and Mercato team members when the transaction completes in March.
The statement did not reveal the acquisition price but a report in The Edge stated DFI disposed of its food retail chain for “at least a couple of billions (of ringgit)” to a group of Malaysians led by Lim.
DFI said Lim has an “extensive and successful track record in retail leadership”, credited with significantly contributing to the growth and transformation of the retail landscape in Malaysia.
“The local retail group shares similar beliefs as DFI in delivering great quality, service and value to customers,” it said.
DFI Southeast Asia CEO Chris Bush said: “We are delighted to be able to transition our food business to a well-respected and successful local retail group, who will also be retaining our dedicated team members as well.”
In a statement, Lim said he was grateful to DFI for “entrusting to us the guardianship and future advancement of all these outstanding Malaysian retail brands”.
“We shall endeavour to add value and enhance the respective brand equities of Cold Storage, TMC, Giant and Mercato in Malaysia,” he said.
Aggressively shutting stores
According to The Edge report, GCH had been aggressively shutting stores in Malaysia since 2019, bringing the total number of stores to fewer than half by 2021, in a bid to return to the black. In 2018, it operated some 122 stores.
The company had been in the red from 2013 and returned to the black in 2020, posting RM12.23 million in net profit.
The retailer slipped back into the red in FY2021. It is yet to file its financial results for the year ended Dec 31, 2022.
In FY2021, DFI posted a net loss of RM106.17 million, on the back of RM2.38 billion in revenue. It had total liabilities of RM2.71 billion and total assets of RM1.23 billion.
DFI to focus on Guardian stores
Meanwhile, DFI said it was fully committed to its retail business in Malaysia, and will continue focusing on the fast-growing health and beauty business. It currently owns and operates Guardian health and beauty stores.
“This transition will allow us to focus our priorities exclusively on the expansion of our Guardian health and beauty business in Malaysia,” said Bush.
Over the next two years, the company plans to continue refreshing the Guardian store format and significantly expanding its store network (currently over 500), with the expected “creation of hundreds of jobs”.
“We are very excited by the opportunities for Guardian as it continues to grow rapidly, bolstered by the significant expansion of our store network, store refurbishments and improved customer offerings,” he added.