Malaysian discount-store retailer Eco-Shop Marketing Bhd plans to attract investors early next week ahead of its planned initial public offering (IPO).
The company, said to be valued at over $1 billion, is testing investor appetite following the success of 99 Speedmart’s IPO offering. Eco-Shop’s offering, which operates 320 stores (including 25 Eco-Plus stores) nationwide, is likely to be over $200 million.
When a company lines up cornerstone investors before its IPO, it makes attracting interest from institutional and retail investors easier.
Currently, 80.3% is owned by founder and managing director Datuk Seri Lee Kar Whatt, while 10% is owned by Agathis Montana Sdn Bhd (AMSB), a vehicle of Creador IV.
According to the New Straits Times, Eco-Shop plans to float its shares on the Main Market to raise funds to add 70 more stores.
AMSB and Lee are both selling their shares in the company. Following the sales of shares, AMSB will cease to be a substantial shareholder and will only hold a stake of 1.9%.
Lee will retain a 73.1% stake in the company after selling the shares.
Eco-Shop intends to use its IPO proceeds to expand its store network, especially in suburban and rural areas, as well as upgrade its digital systems and enhance its mobile application.
What is Eco-Shop?
Eco-Shop started in 2003 in Gemas, Johor selling all goods for RM2. The shop sells food, household products, stationeries, kitchenware, plasticware, toys, and hardware.
It opened its 100th store in 2018 in Gombak, Selangor and continued expansion in East Malaysia in 2019.
In December 2021, they raised their prices to RM2.20 per item but it went up to RM2.40 per item six months later, remaining at that price for now.
It opened its first Eco-Plus store in Ulu Tiram, Johor in 2021. The following year, they launched the Eco-Shop Loyalty Program and mobile app.
Meanwhile, the first concept store was opened in IOI City Mall, Putrajaya last year. The Eco-Plus concept store boasts quality household products priced below RM20.
Eco-Shop opened its 300th outlet in NU Sentral coinciding with its 21st anniversary last year. The new store also features self-checkout counters for a quicker and more efficient shopping experience.
