Last April 7, the city of Makati sent a congratulatory certificate and a P100,000 check reward to Bienvenido Tantoco Sr., the 84th resident who has lived up to 100 years.
Chump change for one of the Philippines’ richest men. But more than the longevity milestone is his humor. His daughter had said he has been keen to use the funds as a wedding gift for one of his 21 grandchildren. In his 30’s and without a girlfriend, the grandkid and the rest of the clan instinctively recognized their patriarch’s subtle and canny ways to send a message.
In the morning of July 6, Tantoco, the family patriarch who cofounded upscale retailer Rustans Group of Companies, passed away. He was the 9th among pre-war tycoons who died in the past four years: Andrew Gotianun Jr (FilInvest), Alfonso Yuchengco (House of Investments), George Ty (GT Capital), Henry Sy (SM Investments), Mariano Que (Mercury Drug), David Consunji (DMCI), John Gokongwei Jr (JG Summit), and Eduardo Cojuangco Jr (San Miguel).
Only Tantoco was a centenarian.
As usual with the death announcement of a prominent elite, there was an outpouring of remembrances for the “father of Philippine luxury retail.” There were snippets from his friends and family of his distinct humor, gentlemanly habits, love for travel and delectable cuisines, and prompts on the importance of work ethic and civic duty. The goodwill built over decades of riding on the one-percent’s buying habits are the attached legacy of “Benny,” as he was fondly called.
Forbes estimated his wealth at US$140 million as of 2019, when he ranked the 40th richest in the Philippines. In 2006, he ranked 21st.
A self-made man of Chinese descent, Benny Tantoco was the second of eight kids of a farming-fishing trader, Luis Buendia Tantoco from Malolos, and a music teacher, Carmen Fabella Rufino. His father abruptly died when he was 16, elevating him to become the family breadwinner. His mother’s Fabella side granted him college scholarship, while the Rufino side gave him work at their chain of movie theaters.
For Tantoco’s good performance, the Rufinos rewarded him and his wife, Gliceria Rustia, a trip abroad. From this first and their succeeding trips to fashion capitals, his wife “Glecy” brought back premium goods and trinkets which she then sold to friends in their 2-story house in Ermita. The buy-abroad-sell-at-home business caught on, and eventually Tantoco left his accounting job with the Rufinos to go full time. In 1952, Rustans — merged last names of the couple – was officially born.
In company anniversaries many decades on, Tantoco would always credit his late wife for the business’ leaps and bounds. Glecy had the knack for retail, buying luxury foreign items that would whet the appetite of her rich friends at home.
While Glecy was Rustans’ emissary for good taste and high style, he took on the financial and operations obligations to keep everything humming. Gritty, brave and innovative, the startup founders paved new paths and, starting in the 1960’s, forged partnerships with international high-end fashion empires, like that of Yves Saint-Laurent, Christian Dior, Ferragamo.
From upscale fashion, bags, shoes, luxury lifestyle items in Rustans Department Stores, the power couple expanded into grocery shopping in the 1970’s, introducing Filipinos to Kikkoman brewed soy sauce from Japan, and Chupa Chups lollipops via the Rustans Supermarkets’ shelves in capital Manila, and then Cebu.
In those first three decades, the small gift shop in their San Marcelino Street garage in Malate became the premier retailer in the Philippines (before SM outranked them in the 1980s).
The globe-trotters would eventually be drawn to the inner circle of another power couple who loved the good life, the Marcoses. President Ferdinand Marcos named Tantoco, a Sacred Heart devotee, as ambassador to the Vatican in 1983, a stint and title he would look back to with fond memories. But their high-flying diplomatic lifestyle came to a crashing halt when People Power ended the Marcos regime.
When the former president was ousted in February 1986, the Tantocos were among the Marcos supporters who fled the country and lived in exile. Glecy would later be alleged to have acted as a front in the Marcoses’ purchase of real estate and art in Manhattan using stolen money from Philippine treasury. She spent over a month in jail in Rome airport fighting extradition to the US where a court ordered the freezing of Marcoses’ assets. The couple and some of their children eventually settled in Morocco where they lived a more modest life in exile.
The Tantocos have repeatedly considered these as false accusations and a form of political persecution. One of the cases they’ve been most associated with was allegations they acted as Marcoses’ dummies in operating duty free shops. In 2019, the anti-graft court Sandiganbayan ruled in Tantocos’ favour. The court said the Presidential Commission on Good Government, the agency tasked to recover ill-gotten wealth, failed to prove the authenticity of the documents it submitted.
They returned to Manila in 1993. Benny Tantoco became more involved in the business, taking over from eldest son and namesake Bienvenido Jr, or “Rico”. Glecy passed away in 1994. Eldest daughter, Zenaida Tantoco, or “Nedy”, eventually took over the helm of the department store and supermarket operations, while Rico found his footing in the development of Sta Elena Golf Club, a residential enclave in Laguna. As the second and third generation family members (and in-laws) took on more responsibilities in the companies, another crisis hit: the 1997 Asian financial crash.
The crisis highlighted the resilience of their loyal customers who have pockets deep enough to withstand a major economic turmoil, one that countries and their business peers would take years to recover from. Rustans’ army of well-trained staff bodes well in catering to the discriminating tastes of their upper-crust clientele. Rustans has been hailed for employing staff who don’t have to bother about losing jobs after a less-than-six-month contract, a labor arrangement most Philippine retailers have been castigated for.
While many Asian family businesses had their hands full surviving, the Tantocos were innovating. To complement their growing portfolio of international brands, they expanded into other retail formats. They introduced Starbucks coffee shops in 1997, and Shopwise in 1998. The latter is a hypermarket, their European-style strategy to slug it out with grocery goliaths, SM and Robinsons. The discounted retail format was meant to target the cost-conscious middle and working class, a market beyond their usual.
Benny Tantoco himself retired and took on the chairman emeritus title. He played his family patriarch role with gusto, becoming the glue for constant and consistent gatherings and one-on-one magic moments. He trained the generations after him about family dynamics and business resilience via osmosis, as his kids, grandkids and great-grandkids described in numerous glossy magazine features and lifestyle columns in newspapers.
He turned over an empire steeped in tradition and with skillsets for the logistical, supply chain, demand creation, and loyalty design needs of the high-end to upscale Filipinos. The new business leaders in the family, however, were keen to ride on the opportunities that the changing and improving economic realities provided, thanks to money sent home by Filipinos overseas, and the booming outsourcing sector.
When annual disposable income rose to $208 billion in 2013 from $129 million in 2009, the younger Tantocos broadened their reach to cater to the aspirational market, comprising mostly of working professionals and the youth whose shopping habits and spending capacity have changed over the years. The Tantocos joined other Filipino business groups in chasing consumers outside Metro Manila.
It was a strategy that proved replete with lessons on business failures, execution missteps, partnership choices, and biting the bullet.
The supermarket business was losing money as they followed an often suggested formula of scaling fast to gain momentum. So dizzying was the pace of store openings, but these did not generate enough cash to pay off maturing loans. Donnie Tantoco, the son of Rico who led the unit, shared in an interview how they had to talk to suppliers to allow them to delay payment. Loans were paid in full and on time.
It was the supermarket unit that pushed the family to take in outside investors for the first time, starting with venture capitalists, followed by a 50-50 partnership with pan-Asia multiformat retailer Dairy Farm in 2012. From this five-year partnership with Dairy Farm came about smaller-sized, easier to roll-out retail formats, such as Shopwise Express and Wellcome. The latter is a regional neighborhood supermarket brand catering to — surprise, surprise! — the mass market.
In 2017, the Tantocos decided to fully divest from the grueling and capital-intensive supermarket business. The year after, Dairy Farm flipped and sold the entire stake in the operator of Rustans Supermarket and Shopwise to the Gokongwei family’s Robinsons Retail for P18 billion. Robinsons has since rebranded “Rustans Supermarket” as “The Marketplace” since the Tantocos’ holding firm kept the “Rustans” trademark. The Tantocos (and partners from the Ayala group) also sold their stake in the loss-making FamilyMart convenience stores to Davao businessman Dennis Uy, as well as in Wellworth to the Gaisano family’s Metro Retail Stores.
Letting go of a business unit that had been one of the original cash cows of Benny and Glecy was part of efforts to refocus the group’s energy and resources on the department stores and the franchising of international fashion and lifestyle brands. Stores Specialists Inc, later renamed SSI Group, was the vehicle for the latter and had a blockbuster Initial Public Offering in 2014, raising about P5 billion to beef up their coffers to pursue that growing middle class.
SSI, led by Nedy’s son Anton Huang, expanded the breadth and width of their portfolio. In addition to their Hermes and Gucci luxury brands were Kate Spade and Michael Kors “bridge” (or affordable luxury) brands, GAP and Lacoste “casual” brands, and Zara, Stradivarious, Bershka, Old Navy “fast fashion” brands. Also added were MUJI, Pottery Barn, Lush, L’Occitane, Beauty Bar, and food brands TWG, SaladStop and Shake Shack.
As the mall developers chased target shoppers outside Metro Manila, SSI was among the tenants of choice, especially for upmarket malls aimed at affluent customers and those who aspired for the same lifestyle. For the first time, SSI also built its first mall, the Central Square building in upscale Bonifacio Global City.
It was an aggressive geographic expansion along the prominent “retail is scale” industry theme. But aside from reach, SSI had to contend with a huge influx of brands. Luxury spending, pegged at $1.4 billon in 2018 by Euromonitor International, attracted other players, like rival international brands H&M and Uniqlo that operated their own chains, as well as local players Suyen Corporation (Bench), LVMH (Louis Vuitton), Robinsons Specialty Stores (Topshop, Dorothy Perkins, Shiseido, etc), Vogue Concepts (Promod, Levi’s, etc), Retail Specialist (Florsheim, Naturalizer, etc), and Primer International (Travel Club, Bratpack, ROX, etc). Competition meant price wars.
Investors started to be concerned with SSI’s bloated inventory levels, climbing as high as 421 days in September 2016. Since 2014, SSI opened 195 new stores in just two years, most of these located outside Metro Manila. Intense competition and lackluster sales in these areas were not sufficient for SSI’s brands to thrive in. Unsold stocks meant SSI would need to write these off in the future, or sell them at a discount. Debt was piling up.
Pruning came in the form of a 3-year rationalization program. They closed about 176 stores from 2016 to 2018. They bit the bullet and wrote off way over P700 million in losses from closing stores, unsold inventory, and the losses in FamilyMart and Wellworth ventures.
In 2016, SSI had 114 brands available in 708 stores nationwide. At end-2020, these have been whittled down to 96 brands managed across 570 stores. Inventory and debt levels have stabilized.
Before the pandemic hit in 2020, the listed retailer was finally stronger and financially more stable with its 2019 asset base of P22 billion. That’s 1.8 times more than SSI’s almost P12 billion way back in 2013, more moderate than that of other retailers that have stayed in the game. In the same seven-year period, Robinsons Retailer, the listed parent of Robinsons Specialty Stores, grew its assets 2.7 times more.
Enter 2020, a crisis year of mind-boggling proportions. The pandemic and quarantine restrictions heavily impacted retailers of all shapes, sizes, and scale. SSI’s net 2020 sales of P12.2 billion showed a 45% decline. Bottomline reflected P904 million losses.
In true deja vu fashion, luxury brands were the saving grace in crises, thanks to the tried-and-tested, resilient purchasing power of the upper-income class buyers. Fast fashion brands, which used to deliver more than one-third of total revenues and had been SSI’s fastest growing category, contributed P3 billion in sales, a far cry from those P7 billion-a-year times. Footwear and luggage brands that generated P2.5 billion yearly sales plunged to just a P900-million bracket. Luxury and affordable luxury brands contributed P4.5 billion in 2020, offsetting lower sales of the others catering to the middle class.
Rustans Group chairperson Nedy had described her dad Benny Tantoco in several media interviews as the original “retail therapist.” After all, shopping — either online, as is prevalent in these days of pandemic lockdowns, or in brick-and-mortar stores that were aggressively and costly curated over the years — has been a form of therapy in good times and especially in bad.
Benny Tantoco has survived wars, political and economic upheavals by being the foremost purveyor of luxury and aspirational goods. The generations after him are navigating a global crisis of their own with the tools and grit they’ve picked up from him.
Lala Rimando 
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