SPECIALTY retailer SSI Group, Inc. said its subsidiary entered into a joint venture agreement with the entity behind Gucci to form a company named Luxury Goods Philippines, Inc. (LGPI).

It said the agreement was forged on May 17 between its unit Stores Specialists, Inc. and G Distribution B.V. (Gucci).

“The joint venture between SSI and Gucci further strengthens the cooperation between Gucci and SSI, and is expected to further accelerate the growth of the Gucci brand in the Philippines and enable operating efficiencies, as Gucci and SSI transition from a franchisor-franchisee relationship, to joint venture partners,” SSI told the stock exchange on Wednesday.

SSI said LGPI will have an initial capital of P350 million. The listed company will own 25% of the joint venture while Gucci will own the remaining 75%. The numbers translate to an initial investment amount of P87.5 million for SSI and P262.5 million for Gucci.

“LGPI is expected to commence operations on June 1, 2022, and shall own and operate Gucci stores in the Philippines,” it added.

SSI said the joint venture’s profits will be distributed pro-rata between SSI and Gucci.

On Tuesday, reported a net income of P67.7 million in the first quarter, turning around from a loss of P99.5 million in the similar period the year before. Sales during the quarter were up 28% to P4.5 billion, with e-commerce sales also increasing by 21% year on year.

In 2021, the company’s net income was up 117% to P151 million. Revenues likewise rose by 26% to P15.5 billion.

The company’s brand portfolio ranges from luxury, casual, fast fashion, footwear, accessories and luggage, among others.

SSI’s specialty retail footprint consists of 570 stores located within approximately 83 malls across the Philippines.

At the stock exchange, shares in the company were unchanged at P1.27 each on Wednesday. — VVS