Printer Friendly

Grupo Elektra Acquires 35 La Curacao Mexico Stores in Southeastern and Central Mexico.

First Acquisition of Announced Cash-Flow Accumulation

and Consolidation Strategy

MEXICO CITY, July 10 /PRNewswire/ --

Grupo Elektra S.A. de C.V. (NYSE: EKT) (BMV: ELEKTRA), Latin America's leading specialty retailer and consumer finance company, today announced that it has acquired La Curacao Mexico's 35 stores in southeastern and central Mexico from a private investor group for US$5.4 million. The cash transaction increases Grupo Elektra's presence in Mexico's key southeastern retail market to 163 stores from 141.

La Curacao Mexico, which specializes in electronics, white line and appliance retail sales, had revenues of approximately US$30 million in 2000. Its 35 stores are located in the states of Yucatan, Campeche, Veracruz, Guanajuato, Tabasco, Puebla, Quintana Roo, Queretaro and Oaxaca. In addition, La Curacao Mexico has four distribution centers and three service centers.

Javier Sarro, chief executive officer of Grupo Elektra, commented, "Our strategic plan outlined at the beginning of the year calls for increasing Grupo Elektra's cash position to take advantage of acquisition opportunities that usually come about during a slow economy. La Curacao is the first acquisition we make under this economic environment. As previously announced, we foresaw the slowdown, accumulated cash, and are now in a position to further consolidate the market."

"Over the years, Elektra has successfully followed this policy and realized significant growth while most of our competition faltered. La Curacao Mexico is an excellent acquisition that is reasonably valued and meets all the criteria we established for expanding our retail operations."

"Furthermore, adding this chain of stores raises the barriers to entry for competitors in the southeast market and strengthens Grupo Elektra's presence in this growing market. We are acquiring these excellent locations, chosen by La Curacao, for less than it would cost to build new stores, and we are simultaneously increasing our credit and collection business. This acquisition reinforces Elektra's leadership position in Mexico and will clearly benefit our shareholders."

Grupo Elektra plans to convert the 35 locations to 15 Elektras, nine THE ONEs, five Salinas y Rocha and four Bodegas de Remates stores as soon as possible. The remaining two stores will be closed. After the acquisition, there will be no La Curacao stores, and Grupo Elektra will retain the rights to this brand name in Mexico.

With this acquisition, Grupo Elektra plans to reach a total of 995 stores by year-end 2001. This will include 679 Elektra stores, 92 Salinas y Rocha stores, 153 The ONE stores and 71 Bodega de Remates stores. These are net amounts that take into consideration closings, conversions from other formats and relocations. On a gross basis (i.e., before expected closings during the second half of 2001), the total store count at year-end is expected to be 1,001 stores.

Except for historical information, the matters discussed in this press release are forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Risks that may affect Grupo Elektra are identified in its Form 20-F and other filings with the US Securities and Exchange Commission.

Grupo Elektra -- Tradition with Vision

Grupo Elektra is Latin America's leading specialty retailer and consumer finance company. Grupo Elektra sells goods and services through its Elektra, Salinas y Rocha, and THE ONE stores and over the Internet. The Group operates almost 1,000 stores in Mexico and five other countries in Latin America, as well as its virtual stores, offering household appliances, furniture, and clothing. Financial services include consumer credit, money transfers, extended warranties, servicing of home mortgages, and savings accounts.
COPYRIGHT 2001 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 10, 2001
Words:591
Previous Article:KLA-Tencor Announces Live Webcast of Upcoming Financial Analyst / Investor Meeting at SEMICON West.
Next Article:Indalex Inc. to Close Indalloy Cast House at Ahoskie, North Carolina.
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters