By  on August 30, 2011

MEXICO CITY — Mexican upscale department store chain Palacio de Hierro has taken a $369.2 million syndicated bank loan to finance its Mexican expansion, the company revealed in a regulatory statement.

The funds will help the 123-year-old chain roll out new stores for its three main retail formats, including its traditional department stores, which average 236,780 square feet; smaller La Boutique Palacio shops, and upscale houseware chain Casa Palacio.

Palacio de Hierro, which is held by Mexican industrial group Val, would not provide more details about the loan.

Last fall, financial director Carlos Salcido revealed to WWD that the chain intends to open 10 stores by 2015 as it continues to expand in Mexico’s growing luxury fashion market. He added the company hopes to establish five of its classic department stores and five La Boutique Palacios by then.

Company spokeswoman Gina Pineda said those plans are still on track. She said Palacio’s next department store will open in Mexico City’s Interlomas quarter. The 269,000-square-foot store will feature structural and shopping innovations unseen in its other locations, she said.

“It’s going to be a very different department-store experience,” she noted, adding that the store will have no hallways and will be divided into merchandise zones or “universes” to give consumers an entirely new shopping experience.

Interlomas is set to open in mid November. Palacio will also open department stores in Villahermosa and Queretaro, Mexico, scheduled to open in 2012 and late 2012-early 2013, respectively. A store in Veracruz and another location are also in the cards.

With over $1 billion in sales last year, Palacio carries a broad range of international luxury brands to set itself apart from rivals such as Liverpool and Sears.

Fashion and luxury account for 50 percent and 15 percent, respectively, of apparel sales. As it seeks to grow the category, the chain has been striving to persuade high-end global brands to set up corners in its shops.

The effort has proved fruitful with brands like Bottega Veneta, Hermès, Givenchy and Marc Jacobs already present in its stores.

Later this year, Jimmy Choo is expected to arrive in its stores, Pineda said, adding that Sergio Rossi and Manolo Blahnik will follow. Women’s wear labels Ugg and Etro will also be opening corners this fall, following Tory Burch’s recent debut, Pineda added.

In the beauty category, Joe Malone and Khiel’s are expected to open corners in coming months, according to Pineda.

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