Philippine Seven Corporation (“PSC”) was registered with the Securities and Exchange Commission (“SEC”) on November 23, 1982. It acquired from Southland Corporation (now Seven Eleven, Inc. or “SEI”) of Dallas, Texas the license to operate 7-Eleven stores in the Philippines in December 13, 1982. Operations commenced with the opening of its first store in February 29, 1984 at the corner of Kamias Road and EDSA Quezon City, Metro Manila. Considering the country’s economic condition at that time, the Company grew slowly in its first few years of existence.
In July 28, 1988, PSC transferred the Philippine area license to operate 7-Eleven stores to its affiliate, Phil-Seven Properties Corporation (“PSPC”), together with some of its store properties. In exchange thereof, PSC received 47% of PSPC stock as payment. Concurrent with the transfer, PSC entered into a sublicensing agreement with PSPC to operate 7-Eleven stores in Metro Manila and suburbs. As part of PSPC’s main business, it acquired or leased commercial properties and constructed retail store buildings, leasing the buildings to PSC on long term basis together with most of the capital equipment used for store operations. In effect, PSC concentrated on managing its stores and effectively took the role of a pure retailer.
In May 2, 1996, the stockholders of both PSC and PSPC approved the merger of the two companies to advance PSC group’s expansion. In October 30, 1996, SEC approved the merger and PSPC was then absorbed by PSC as the surviving entity. With the consolidation of the respective lines of business of PSC and PSPC, PSC’s retailing strengths were complemented by PSPC’s property and franchise holdings. Their management as a single entity enhanced operational efficiency and strengthened ability to raise capital for growth. PSC listed its shares (SEVN) in the Philippine Stock Exchange and had its initial public offering in February 04, 1998. The shares were offered at the price of P4.40 per share from its par value of P1.00 per share. In September 17, 1998, PSC established Convenience Distribution Inc. (“CDI”), a wholly owned subsidiary, to provide logistics planning and services to its 7-Eleven stores.
With the effectivity of the Retail Trade Liberalization Act (R.A. 8762) on March 25, 2000, foreign entities were allowed to invest in an existing retail company subject to the requirements of the law. President Chain Store (Labuan) Holdings, Ltd. (PCSL), a Malaysian investment holding company, purchased 119,575,008 common shares of PSC or 50.4% of PSC’s outstanding capital stock at the price of P8.30 per share. The purchase was made under a tender offer during October 9 to November 7, 2000. PCSL is affiliated with President Chain Store Corporation, which is also the 7-Eleven licensee in Taiwan. This provided source for technical support to strengthen PSC’s organizational structure and operating systems and pursue store expansion plans. A new affiliate, Store Sites Holding, Inc., was also established on November 9, 2000, as the entity to own land properties. These land properties are leased to PSC by SSHI.
PSC’s area license to operate 7-Eleven Stores in the Philippines was renewed in August 31, 2007 for another term of 20 years, renewable every 10 years. The Renewal Area License Agreement has been approved by and registered with the Intellectual Property Office as of September 25, 2007.
PSC initiated the establishment of PhilSeven Foundation, Inc. (PFI) in October 2, 2007 to support its corporate social responsibility programs. PFI was granted a certificate of registration by DSWD on August 6, 2010, after completing the 2-year operations requirement. BIR issued a certificate of registration to PFI dated December 21, 2011 recognizing PFI as a donee institution. In October 10, 2013, PFI became a member of the League of Corporate Foundations, Inc. In July 08, 2016, DSWD issued a Certificate of Registration to PFI allowing it to expand its operations from NCR to nationwide which is valid for 3 years.
As of December 31, 2017, the Company has a total of 2,670 direct hires and augments its temporary needs during peak hours or season in the stores and the support services units with cooperative members. There is no existing labor union in the company and collective bargaining agreement. There is a PSC Employees’ Council which communicates to management the employees concerns. There has been no strike or threat to strike from the employees for the past three years.
The Company provides supplemental benefits or incentives to its employees such as: retirement benefit plan, health card group life and and accident insurance plan, various employee programs and recognition of top performing employees and service awards among others.
Recognizing the need of employees for growth, training and development programs are regularly provided by PSC across all levels. For Senior Management and Officers, the company conducts a Leadership Academy & Mentor’s Leadership Training Program with the objective in line with the Company’s succession planning program. In-house trainings on skills, products, basic negotiation, change management, retailer initiative and basic operating procedures are also provided by the Company to employees. These are offered periodically based on annual training calendar every month or quarterly. In-house trainings are designed to augment and develop the employee skills and competencies.
The top risks in retail industry to which PSC belongs include increase in competition, brand reputation and business operations/supply chain continuity. Meanwhile, the main risks arising from the Company’s financial instruments are credit risk, liquidity risk, and interest rate risk. The Audit Committee ensures the integrity of internal control activities, develops, oversees, checks and preapproves financial management functions and systems in the areas of credit, market, liquidity, operational, legal and other risks and crisis management. The Internal Audit Division and the External Auditor directly report to the Audit Committee regarding the direction, scope and coordination of audit and any related activities.
At year end, PSC is operating 2,285 stores, 1,224 of which are franchise stores and the remaining 1,061 are company-owned stores. The store franchise contracts have an average term of 5 years each.
PSC continually observes the activities of its major competitors in line with its strategy to maintain its leadership in the Convenience Store (“C-Store”) Industry. Entry of foreign brand C-Stores increase in 2014 and a number of other generic or hybrid stores or grocery stores including gas marts continue to be present. PSC has forged a non-exclusive tie-up with Chevron Philippines Inc. in August 2009 for opening of 7-Eleven stores in selected Caltex gas stations and there are 92 7-Eleven Stores as of 2017. The Company continues to sustain its leadership by putting stores in strategic locations, carrying product assortment fit for such market.