|CRC chief executive Tos Chirathivat says the acquisition of the luxury Italian department store |
has made the company a world-class leader in the retail industry.
Central Retail Corporation (CRC), the country's largest retail chain, has made history in the Thai retail business by acquiring a 150-year-old chain in Italy for 11 billion baht.
CEO Tos Chirathivat said the company had signed a contract with the shareholders of La Rinascente in Milan to purchase 100% of the shares in the chain for 260 million (11.27 billion baht). The contract signing followed the acceptance of CRC's binding proposal by the shareholders of La Rinascente.
"The 100% purchase in La Rinascente is part of our merger and acquisition strategy to speed up the expansion of our business. Italy is the second country we have expanded to after China, which now has two Central department stores," he said.
With the acquisition, Mr Tos said CRC had become a world-class leader in the retail business with another brand added to its portfolio of Central, Zen and Robinson.
La Rinascente, a top luxury department store in Italy, is well known among tourists since it is located next to the Milan Cathedral or Duomo di Milano, the city's top tourist attraction.
CRC has a plan to promote La Rinascente as a world-class lifestyle brand within the next 3-5 years in international markets such as Europe, Asia, South America and the Middle East.
Currently, there are 11 La Rinascente stores in Italy in major cities including Rome, Milan and Florence. New flagship stores are also scheduled to open locally in several tourist cities in the future.
Mr Tos said there would be no management change at La Rinascente, which is led by chief executive Vittorio Radice. The Italian retailer posted sales of 350 million in 2010.
Mr Tos said the company hoped to open one Italian outlet per year. The first two are expected to be in Rome and Venice. Each requires an investment of one billion to 10 billion baht, depending on whether the company rents the property or invests by its own.
Mr Tos said CRC was not worried about the economy in Italy. La Rinascente has grown steadily over the past five years despite the sluggish economy because the chain has continually focused on improving its business.
The acquisition will bring various benefits to Central - from creating new opportunities for the group in the global market to distributing Italian products both in Thailand and abroad. It could also have access to new retail technology and know-how transfer.
"It is a two-way trade. It could create an opportunity for made-in-Italy products to expand in profitable and fast-growing new markets while at the same time bringing Thai-made products to international markets," Mr Tos said.
He added CRC sales would reach 100 billion baht this year and La Rinascente department store would contribute about 15% or 15 billion baht to sales next year. The investment is expected to break even within 8-10 years.
The company is looking for similar investment opportunities in Thailand, China, Asean and European countries.