Sy - TIME

PHILIPPINES
Sy
SM GROUP
Henry Sy is battling his kids to keep his burgeoning retail empire free of outside management. He'll lose 2003 Revenues: $1.7 billion

Henry Sy runs the Philippines' largest retailer, but he operates his SM Group almost as if it were a family-owned corner greengrocery. Each week Sy (estimated net worth: $1.4 billion), sporting his trademark Hawaiian shirt, gathers his six children at the company's warehouse-style offices near Manila's waterfront, where they oversee nearly every aspect of the business. On Saturdays family members fan out to conduct firsthand inspections of their SM malls, department stores and supermarkets. On Sundays Sy, 80, insists that the family meet yet again, either at his $2 million luxury log cabin in the lush hills outside Manila or at the family home in the swish Forbes Park district of the capital. He cooks lunch.

Sy's communal approach has helped him build the Philippines' equivalent of Wal-Mart Stores. SM Group is a retail giant, with 38,600 employees and annual revenues of $1.7 billion. Despite that success, Sy's children realize that the all-in-the-family management style is becoming outdated. Like so many of Asia's big business clans, a generational shift and the stresses of running an increasingly complex company are forcing the insular Sys to open up more to outsiders. "For my father, the organization is the family," says Sy's eldest daughter Teresita Sy-Coson, known as Tessie. But "in the future, you'll see more professional managers," she adds.

Things have certainly become more complex since 1936, the year Sy left China for the Philippines to join his father, the proprietor of a tiny grocery store in Manila. In the 1950s Sy opened his own shop, selling shoes. He branched into department stores in the late 1950s and supermarkets in the 1970s. But his big breakout came in 1985, when he opened his first supermall in the Quezon City district of greater Manila, which was then practically undeveloped. The business community expected Sy to lose his (Hawaiian) shirt. Instead, his clean, air-conditioned venue introduced modern shopping to a nation. "We changed the lifestyles of the people here," Sy beams. The empire continues to grow in size and sophistication. SM operates 17 malls and plans to open two or three more each year until 2008. The company has also entered the booming China market, and eventually the Sys want to diversify into commercial real estate and tourist resorts.

Still, the Sys worry that in bringing in outside managers, something important might get lost. The collegial atmosphere they have created can't be found in any ordinary boardroom. At a business lunch in Manila, members of the family, each striving to talk over another, banter happily about malls, politics, their kids. When Sy declares, "I've never had an inferiority complex," Henry Jr., the eldest son, quips, "only shopping complexes." The family bursts into gales of laughter. The trick will be preserving what Tessie calls a "continuity of culture," preserving that family spirit even as the Sys' role diminishes.