The Tantoco family’s SSI Group Inc. has upgraded its partnership with luxury goods firm Prada S.p.A from a franchise to a P380 million joint venture which is seen to ramp up the brand’s expansion in the Philippines.

In a disclosure to the Philippine Stock Exchange (PSE), SSI said its wholly-owned subsidiary Stores Specialists Inc. has subscribed to 16.67 million  common shares of PRADA Philippines Inc. at a par value of P1.00 per share.

PRADA Philippines is a newly formed joint venture company that is 60-percent owned by Prada S.p.A and 40 percent-owned by Stores Specialists. 

SSI's initial investment is P16.67 million while Prada's initial investment is P25 million. At completion, SSI's total investment in PRADA Philippines will be P152 million, while Prada's total investment in the joint venture will be P228 million.

The joint venture company shall own and operate PRADA stores in the Philippines. It will commence operations on Jan. 1, 2024.

It is expected to accelerate the growth of the PRADA brand in the Philippines and enable operating efficiencies, as SSI and PRADA transition from a franchisee-franchisor relationship to joint venture partners. 

SSI’s net income for the first nine months of 2023 amounted to P1.5 billion, a 66.3 percent jump from the P918 million during the same period last year.

For the third quarter alone, the group generated net income of P520.4 million, an increase of 22 percent as compared to the same period in 2022.

The firm generated sales of P18.9 billion during the first nine months of 2023, an increase of 20.7 percent as compared to the same period in 2022. For the third quarter alone, sales increased by 15.6 percent year-on-year to P6.5 billion.

The group said it saw strong year-on-year sales growth across all of its categories. 

During the nine months ended September 2023, the footwear, accessories and luggage (FAL) category grew by 42 percent while others categories increased by 25.1 percent, the fast fashion category growth was at 15.6 percent, the casual category grew by 14.7 percent, and the luxury and bridge category grew by 4.1 percent.

During the third quarter alone, on a year-on-year basis, FAL increased by 42 percent, others grew by 25.1 percent, fast fashion increased by 15.6 percent, casual wear was at 14.7 percent, and luxury and bridge grew by 7.8 percent.

The group continued to benefit from the quality and breadth of its brand portfolio with higher growth during the period from the FAL, others and fast fashion categories, reflecting a broader consumption recovery across all of the group’s customers, as compared to 2022, when much of the sales growth was concentrated in the premium luxury and bridge category, and higher-end casual category.