Phoon Huat to open more stores this year; on the lookout for deals
PHOON Huat is set to open more stores in Singapore this year, as it crosses a new milestone of US$100 million in revenue.
It is also on the lookout for opportunities to acquire, said Shuichi Sato, chief executive of the home-grown baking supplies retailer, in an interview with The Business Times (BT) on the back of Phoon Huat's acquisition of a majority stake in French goods retailer Le Petit Depot.
But Mr Sato added that Phoon Huat remains a "small and humble" company: "We do not jump into big, fancy deals."
"Regarding Le Petit Depot, it is a humble and stable, yet ambitious, company with whom we share chemistry," he said.
Phoon Huat also intends to remain a speciality retailer. "We specialise in baking products, just like how Le Petit Depot specialises in French products. We will not try to become a big supermarket," Mr Sato said.
Phoon Huat currently has 19 retail stores locally and an online shopping site. It plans to open three more stores this year, taking the tally to 22.
The company has plans to expand overseas as well. This year, Phoon Huat resumed talks with potential partners about expanding into South-east Asian countries. The discussions had been put on hold due to the Covid-19 pandemic.
However, discussions are taking more time than expected, due to travel restrictions and some of the potential partners being focused on navigating the Covid-19 situation, Mr Sato said.
Overall, Phoon Huat is on track to hit US$100 million in revenue for its current financial year ending June. It crossed S$100 million in revenue in 2017.
Corporate records show Phoon Huat Pte Ltd has S$87.1 million in paid-up capital.
The 74-year-old company has come a long way since its beginnings as a shop along Middle Road by Hainanese entrepreneur Wong Tai Fuang. Its website states that the founder made deliveries himself on his bicycle in the early days.
Phoon Huat started out as a wholesale supplier of baking ingredients, but has also grown into a retail chain over the years.
In 2002, it started retailing in supermarkets, invited by NTUC FairPrice, according to its website. That year, the company also set up its headquarters at Pandan Loop.
Phoon Huat's success later caught the attention of Standard Chartered Private Equity, which took a "significant stake" in the company for US$45 million in 2016. A spokesperson for Affirma Capital, the spin-off of the Standard Chartered private equity unit, confirmed this with BT on Tuesday. Then, Phoon Huat had about a dozen retail outlets in Singapore.
Wong Chen Liong, a descendant of the founder and the then-managing director of Phoon Huat, had welcomed the investment, saying it boded well for the firm's succession planning which had been in the works for the last five years.
Members of the Wong family that are involved in the business include James Wong, the founder's grandson and an executive director at Phoon Huat, and Jean Wong, a business development director at the firm.
Mr Sato, who has worked at commodities firms Wilmar and Bunge, joined Phoon Huat in 2018 as chief executive.
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