Tuesday, April 23, 2024

Under Carlos Slim, Sears México is far from bankruptcy

The Sears department store chain filed for bankruptcy in the United States today but its almost wholly Mexican-owned counterpart appears to be in no danger of following suit.

Owned by Carlos Slim, the nation’s richest man, Sears México is in fact opening new stores, renovating existing ones and beefing up its online presence.

“Sears in Mexico has no relationship with the United States and its finances are so healthy that three new stores were opened this year and six were refurbished,” Grupo Carso management told the newspaper Milenio.

Carlos Hermosillo, an analyst with the financial services company Actinver, told the news agency Notimex that Sears México is far from facing the critical situation the company reached in the United States, although he added that it isn’t doing as well as its rivals Liverpool and Palacio de Hierro.

In the second quarter of 2018, Sears sales declined 0.9%, according to the company’s financial report, whereas Liverpool’s sales went up by 7.4% in the same period.

Nevertheless, Hermosillo explained that the chain generates around 50% of all income for Grupo Sanborns, one of several subsidiaries under the Slim-owned Grupo Carso umbrella.

The former has invested around 2.3 billion pesos (US $122 million) this year and by the end of this year is expected to have opened a fourth new Sears store.

In an attempt to boost sales and better compete with its rivals, Sears México is also updating its image by increasing promotion of its fashion lines rather than home appliances, furniture and hardware as it has traditionally done.

“The commercial strategy has changed a lot over the past two or three years, above all in the last 18 months . . . Today, [Sears] is moving towards doing something similar to Liverpool because it’s getting much more into fashion, especially clothes and shoes,” Hermosillo said.

Grupo Sanborns CEO Patrick Slim Domit said recently that improving the company’s e-commerce offerings is a priority.

Grupo Sanborns purchased an additional 14% of Sears México in 2016 from the Chicago-based Sears Holdings, increasing its overall ownership to 99%.

The 95 Sears México stores achieved sales of 25.4 billion pesos (US $1.35 billion) in 2017.

Source: Notimex (sp), Milenio (sp) 

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