Wayne Chen, chief executive officer of Super Plus, will continue to head the restructured group operations of the supermarket chain. Formerly a federation of holding companies, Super Plus will be brought under the umbrella of a single company. - File
The Chen family-controlled Super Plus Food Stores is undergoing a major reorganisation to bring what is essentially a loose federation of individually-owned stores into a single holding company, the group's chairman and CEO, Wayne Chen, has confirmed.
"The way the company evolved is from stores owned (in various permutations) between seven siblings and my ex-wife (Antoinette)," Chen told Wednesday Business.
"It is now a federation of different holding companies and we are
converging it under one holding company."
"Our timetable is to get this done by the end of the year," said Chen.
With 38 stores and annual sales of about $12 billion, Super Plus, which started life as a handful of supermarkets in Jamaica's south-central parish of Manchester, is now among the island's largest retail organisations.
But while the number of stores with the Super Plus marquee have expanded rapidly over the past decade, the expansion has been
largely the result of the business decisions of individual members of, or specific partnerships within, the sprawling Chen family, rather than the actions of a central corporation.
Essentially, what all the stores have in common is the brand and the ability it provides the Chens to leverage their combined size with suppliers.
For instance, Wayne Chen, the driving force behind the group, owns four of the 38 stores outright and with brothers Richard and Charles, owns another 11 via a company called Tikal Limited. Wayne Chen and a third brother also own a single store. Additionally, Wayne Chen's former wife, Antoinette Chen, owns four stores.
Different groups of owners
"Different stores have different groups of owners," Chen explained. "That worked well in growing the company, but now there is need for greater efficiency in dealing with back-office operations. Additionally, people move at different pace and so on."
Supermarket operators in Jamaica have long complained of the thin margins in their business and have argued recently that these have been eroded by rising utility costs, particularly electricity. Developments such as these made the drive for efficiencies, which the Chens hope to gain from their reorganisation, important analysts say.
According to Wayne Chen, a trucking and transportation company, controlled by brother Richard Chen, which moves Super Plus' goods, will not be part of the deal.
The conglomeration will be on the basis of a shares swop that will give the current supermarket owners stakes in the umbrella holding group, in which Wayne Chen will be the largest single owner.
"It is true that I will be the biggest individual but precisely what that stake will be I can't say as yet," he said. "We are now doing the valuations."
Wayne Chen's longer-term vision is to take Super Plus public, but with a sluggish stock market where values have tumbled, Chen said that that environment was not ripe for an offer at this time.
"The market has not been valuing companies decently," he said.