PARIS -- After a failed attempt to enter the U.S. market, Carrefour, a French hypermarket giant, has headed south of the border.
The company signed a joint-venture agreement with the Mexican Gigante retail group to open hypermarkets throughout Mexico.
Before formally agreeing to the venture, the companies opened their first store together last December in Mexico City. It is called Hyper G and is 88,800 square feet. Two other stores -- in Mexico City and Guadelajara -- are scheduled to open this year and will each measure 105,500 square feet.
Further plans have not been disclosed, but at Carrefour's annual meeting on April 21 in Paris, Michel Pinot, a director responsible for the Americas, described the retailer's international expansion policy as "careful."
While other retailers have headed to Mexico with plans to open stores rapidly, Carrefour is in no hurry.
"We have an important stake in the battle for international growth," said president Daniel Bernard at the annual meeting. "We plan to go a little faster in certain countries, and a little slower in others. But what's most important is to have a precise adaptation to a market."
Carrefour did not achieve this in the U.S., but is hoping to learn from its mistakes as it moves into Mexico.
It opened two stores in Philadelphia, in 1987 and in 1992, but last year decided to close them.
"We only opened two stores in the U.S. and without any partners," explained Pinot at the meeting. He noted that Carrefour's buying power on its own was too weak for the group to attain sufficient sales and profits.
When the final tallies are in, losses from the Philadelphia operations should be roughly $34.5 million (200 million francs).
"We learned from this," said Pinot, "It's one of the reasons we did not go into Mexico alone."
Carrefour is the largest retail group in France, with 114 Carrefour stores and 432 Erteco discount stores in its home market, and a growing base of hypermarkets around the world. Net profits for the group last year totaled $296.4 million (1.6 billion francs) on sales of $22 billion (123.2 billion francs).
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