HENRY SY, richest man of the Philippines

How it all started –

Henry Sy, Sr.

Henry Sy was born on October 15, 1924, as Sy Chi Sieng, which means in Chinese “to attain ultimate success”, in the village of Ang-khue in the Dieng-ho municipality of Jinjiang. The 12-year old Henry Sy migrated from his hometown of Jinjiang (now a city near Xiamen) to Manila, and upon arrival he cried when he first saw his father. His dad owned a tiny sari-sari store in Calle Echague (now Carlos Palanca St.). He cried because he saw how difficult life was for him, his father’s struggle and hard work to earn a living with the small store. Their sari-sari store was so small that they didn’t even have a second floor or extra space for bedroom. At night when they closed the store, they cleared the table and slept there. Life was very simple for them.

Henry entered the Anglo-Chinese School in Quiapo at Grade 1. He finished grade school in merely five years, a feat considering he had no textbooks and could only afford second-hand ones. Then the Japanese bombed Pearl Harbor on December 8, 1941. By that year, the Sys had two sari-sari stores. They remained in Echague and continued running their stores as best as they could. Under the Japanese rule, Henry, 17, kept himself busy. He was by then doing much of the buying and selling for the two stores. During the Battle of Manila, the Sys fled to Novaliches, staying there over a week, only to find out, upon their return to Manila, that one of their stores was razed, and the other one, looted. His father returned to China, but Henry stayed.

Post-war Manila saw Henry with few hundred pesos. He began buying cigarettes by the carton from American GIs and selling them by the pack. He also sold scrap metals and odd merchandise that came his way, but he would not remain a peddler for long. The young entrepreneur had bigger plans in mind. Henry approached Don Vicente Lim Rufino who owned a number of properties in Plaza Miranda. He agreed to lease to Henry a property on Calle Carriedo. There, Henry built a stall that served as his store by day and home by night. He bought shoes by job lots from American shoe importers and sold them retail. The Americans importer trusted Henry with their merchandise even if he had nothing to guarantee because Henry as always paid on time.

First Shoemart in Carriedo

The new business performed exceptionally well. Henry began to earn enough to buy his first car, a second-hand Chrysler, for P1,000. He later traded it for a brand new model. He, at 23, also decided to go to college. In 1952, he enrolled at Far Easter University and took up commerce.

He made enough money to lease more properties from Don Rufino. He teamed up with Lao Kang (his neighbor) and the latter’s brothers to open Plaza Shoe Store. Henry and Lao opened their own shoe store, Paris Shoe Store, which was followed by a second and bigger store, Park Avenue Store. Running two stores kept Henry so busy that he was forced to give up schooling. He explains: “I did not finish a four-year course in college, only the two-year Associate in Commercial Science...I had to stop schooling because the shoe-selling took all of my time.”

In 1949, he got his first ever bank loan, P1 million from the Bank of China. Before reaching 30, Henry had made his first million. Musing on this milestone, Henry smiles: “Only the first million is difficult. After that, the rest is easy. There are countless ways to make more money. Only your willingness to work, your imagination, and time can limit the ways.”

By the early 1950s, Henry and Lao Kang had expanded. Aside from the two stores, the partners opened in 1948, Globe Drug Store, and later a soda fountain, acquired from the Sison family of the Sison Ice Drop. In 1954, Henry and Lao decided to divide the business. Lao Kang kept the Globe Drug and Paris Shoe Store. Henry kept the soda fountain and Park Avenue. Henry later sold the soda fountain to focus on shoes.

Henry travelled in the mid-1950s and 1960s. He went to fairs in Europe and US, observing the latest in fashion, store trends, retailing developments. In 1958, Tiger Bazaar, a partnership with Francisco Chong, was renamed Shoemart. It boomed and a second store, on Carriedo was opened. The success of Shoemart stores was driven by Henry’s desire to attract more customers and offer them the best shopping experience. He hired attractive sales ladies. He himself designed window displays and introduced air-conditioning which became a big draw.

From Left: Harley, Elizabeth, Herbert, Henry, Jr., Hans, Felicidad, Henry, Sr. and Teresita Sy-Coson

By 1959, after nine years of marriage, Henry and Felicidad Tan had six children – Teresita (1950), Elizabeth (1952), Henry, Jr. (1953), Hans (1955), and Herbert (1956). The sixth and youngest, Harley, was born in 1959. They had lived in a modest house in Leon Guinto. Elizabeth remembers: “There were three bedrooms. One was our parent’s bedroom and the other we were all crammed into. We slept on the wooden floor on banig.” The girls went to Quiapo Anglo Chinese School, the boys went to Xavier School in Echague.

Life was simple to the Sy family. The children would run errands for their mother, buying items for her at the neighbourhood sari-sari stores. “We took public transportation,” says Teresita. “When I was five or six years old, I would ride the jeep with my mom.”

Despite the success of Park Avenue and the two Shoemart stores in Manila, Henry was looking south to Makati. He bought a lot in North Forbes Park for the sum of P45 per square meter. Henry saw Makati’s huge potential. Henry approached Francisco Chong and broached the idea of opening a third Shoemart in Makati, but Francisco did not agree. Eventually, they decided to dissolve their partnership amicably. Francisco kept the store in Rizal Avenue, renaming it Shoe World. Henry kept the store on Carriedo and the rights to the name Shoemart.

SM Makati

Henry and his family moved to North Forbes Park in 1962 and a year later, Shoemart Makati opened its doors to the public. Henry started erecting buildings in the other commercial lots he had leased before. Manila-based appliance store Automatic Center was among his first tenants, along with Alemars bookstore, the Dulcinea pastry shop and the Joanne Drew Slimming Salon. Henry opened Shoemart Cubao in 1967 and the Manila Royal Hotel in Echague in 1969.

Launched in 1972, Shoemart Manila on C. Palanca St. (formerly Echague) was transformed into the first of Henry’s department stores. Its immediate success inspired Henry to embarked on an even larger expansion in Makati, which was rebranded to “SM Department Store,” or simply SM. The SM Makati, opened in 1975, was the flagship store of SM with over 38,000 square meters of retail space. It introduced shoppers to the concept of one-stop shopping, a set-up intended to provide utmost customers convenience. In the basement was the country’s first fast food courts.

Banco de Oro

In 1976, he bought Acme Savings Bank, with two branches, for P5 million. It is now Banco de Oro, the largest bank. SM Makati was booming, and Henry deemed it was time to build a department store in Cubao’s Araneta Center. Eventually, SM Cubao opened its doors on October 17, 1980. The sprawling department store was a huge hit with the large pedestrian population of Cubao. In 1981, Henry embarked on his most ambitious project yet – a shopping mall. He was going to construct a huge multi-level building, provide retail space for over 100 tenants and put everything under one roof. The mall was to meet all the retail and recreational needs of the typical Filipino family. Henry dubbed it SM City.

SM City North Edsa

During the worst of the crises (after the assassination of Ninoy Aquino on Aug. 21, 1983), Henry Sy had five buildings going up in Metro Manila – SM City North, SM Harrison, SM Annex Makati, Magallanes de Galleria, and Ritz Tower. He was doing what he had always done during the worst of times: he was working harder. Henry spent, at that time, P200 million for North EDSA, which opened in November 1985. The challenges of his first mall helped Henry conceive of the time-honored formula that he would apply to ever “grander plans in the future.

A year before, in 1984, SM Department Store opened in Harrizon Plaza, Manila. Henry also embarked on the construction of a second mall, SM Centerpoint in Sta. Mesa. By 1990, Henry Sy retired as President but remained Chairman. He bought the Ortigas property where Megamall is now, but not after losing a bigger corner lot in a toss of coin with John Gokongwei, Jr. Undeterred, Henry talked to the Que and Alba families who owned lots adjacent to his 5.4 hectare Ortigas property. He now had 10.5 hectares on which to build Megamall which is a mile long and built in three years at a cost of P2 billion. Megamall opened on June 28, 1991.

SM Megamall

“Malling” became city-dwellers’ most preferred form of recreation and the trend continues to this day. “With the SM shopping malls, people tell me that I changed Philippine lifestyles,” says Henry. “Families and friends spend time together in the malls. They shop, dine and have fun, whatever age and whatever budget.”

In June 1994, the SM Group went public and raised P4.7 billion, which was used to build over the next five years SM malls in Cebu, Las Pinas, Bacoor, Fairview and Iloilo. In the mid-1990s, he returned to China. He purchased propertied in China among which was a track of land in his original hometown in Fujian province.

SM Mall of Asia

In the first half of the 2000s, the time, energy and resources of the SM Group were devoted to its project, the SM Mall of Asia (MOA). The mall was envisioned to be the super-structure that would cost billions of pesos to build. Mall of Asia opened on May 21, 2006 with a gross floor area of over 400,000 square meters. On its first day of operation, more than one million people came to see the city’s newest mall.

SM City Baguio

Henry’s interest in Philippine tourism was apparent even in the late 1980s when he acquired properties in Baguio (the old Pines Hotel, which is now SM City Baguio) and Tagaytay (Taal Vista Hotel). “We shall keep investing in new tourist-friendly malls,” Henry says. “We are now master-planning and building a seaside tourism project called Hamilo Coast on a 5,700-hectare property in Batangas shoreline.

Hamilo Coast

Throughout the decade, the SM Group expanded. SM stores and malls, banks, condominiums and hotels opened all around the country. In addition, SM Investments Inc., the holding company of the SM Group, was listed in the Philippine Stock Exchange in 2005. Roughly $550 million was raised in what was considered as one of the largest initial public offerings in the Philippine history.

Taal Vista Hotel

Even as a kid in South China, Henry was already competitive and wanted always to be No. 1 in whatever it is he does. He believes in the idea that anything worth doing is worth doing exceedingly well, no compromises to excellence. Today, Sy is not only the wealthiest Filipino in the Forbes magazine, but No. 1 in shopping malls, his Banco de Oro is now the No. 1 bank and his Tagaytay Highlands is No. 1 mountain resort of its kind.

Tagaytay Highlands

The second-generation Sys have divided control of their retail, shopping centers, banking, and real estate ventures. Henry, Jr. is into real estate, while Hans is in charge of the retail group, banking (China Bank) and mall operations. Herbert heads the supermarket group, while Harley, is the President of SM Investments and the department stores. Elizabeth manages the tourism business and Teresita handles the retail and banking area (Banco de Oro).

His Secrets to Success -

The inspiring Sy phenomenon didn’t happen overnight or through any short-cuts. He worked 10 to 12 hours daily for decades, even on Saturdays and Sundays. He said, “Success is not just good luck. It is a combination of hard work, good credit standing, opportunity, readiness and timing.” His personality is so humble and unassuming.

“His formula is very general,” says Hans. “Just be true to yourself. If you believe in a business, then go into it. Imagine the worst scenario, and if you can still sleep well and eat well, then go ahead.” Henry Sy is a good family man, and his six (6) children exemplify his traditional Confucian values. He said: “I also instilled in my children the importance of good values in business – hard work, determination, integrity and optimism.”

The Sy children learned to work hard and be frugal, while learning also that money is never the ultimate goal. “Our parents taught us that money is not the overriding, most important thing in life,” Henry, Jr. Says. What then was their goal? “Probably achievement.”

The Philippines has been good to Henry. His years of investment have made him the wealthiest man in the country with a net worth of $11.4 billion or P501.6 billion pesos as of March 2014. He is hailed as the “retail king” and called “the father of Philippine malls.”

More than half of the Sy family fortune comes from their stake in SM Investments, the Philippines' biggest company by market value. The Sys own about 59 percent of the publicly traded investment company directly and through holding companies, according to its annual report. They also own 27 percent of SM Prime Holdings, the nation's largest mall operator, excluding SM Investments' interest in the company.

SM Investments holds a 47 percent stake in BDO Unibank, the Philippines' largest bank by assets, and 20 percent of Manila-based China Banking. The holding company also has stakes in two property developers - 44 percent of SM Development and 17 percent of Belle. In addition, Sy controls stakes in Manila-based Far Eastern University, construction company Megawide Construction and property developer Anchor Land.

Based on Bloomberg.com, his fortune, as of April 4, 2014, consists of:

·        $200    million or P8.8 billion in Cash

·        $6        billion – SM Investments Corporation

·        $2.6     billion – SM Prime Holdings

·        $1.1     billion – BDO Universal Bank

·        $601.2 million – Belle Corporation

·        $365.6 million – China Banking

·        $350    million – National Grid Corporation

·        $76.7   million – Far Eastern University

·        $54.4   million – Megawide Construction

·        $39.5   million – Anchor Land Holdings

Henry Sy’s 14 Life Principles:

·        Strive to be the leader in your chosen field

·        Be a person of integrity

·        Have a long-term vision and strategy

·        Focusing would mean concentrating and prioritizing

·        Have a great passion to achieve

·        Word Hard

·        Be patient and persevere

·        Recognize opportunity

·        Try to be optimistic

·        Be confident

·        Be disciplined

·        Build your organization

·        Make it your vision to provide employment

·        Social responsibility is important

Reflecting on his life, Henry says:

“As I move on his life and work on more dreams, I realized something – there is no limit to what we can do. God is good and generous with His gifts to us. He gives us many opportunities and equal time every day. It is up to us to make full use of them. I encourage you to have your dream and work to make it a reality. You are young with the future before you. Remember the young boy who arrived in Manila many years ago, a stranger with nothing to his name ... If i can do it, the young people of today can do it too.”

Sources:

·   Elizabeth Sy, “I Dream: Henry Sy”

·   Forbes

·   Bloomberg.com

·   2012 SMIC Annual Report