By  on March 28, 1994

MEXICO CITY -- Jose Luis Ballesteros, chief executive officer and executive vice president of Grupo Synkro -- Mexico's leading legwear maker and now the second-largest pantyhose producer in the world -- uses New Jersey as a yardstick when sizing up the potential for expansion in his home turf.

Mexico, like New Jersey, has an economy that is roughly one-twentieth the size of the entire U.S. market -- a fact that led Grupo Synkro two years ago to reach beyond its borders for the first time, buying Argentine legwear company Modecraft, then acquiring in January the number two U.S. pantyhose maker, Kayser-Roth, followed by the acquisition of the Hue license from The Leslie Fay Cos.

"After they started discussing the North American Free Trade Agreement, we decided we really had to have a strategy to develop our company internationally," said Ballesteros, and that's exactly what the company did. With its recent series of acquisitions, Grupo Synkro now claims legwear market shares of 58 percent in Mexico, 16 percent in the rest of Latin America and 13 percent in the U.S.

The company's 1993 sales were $200.5 million (641.6 million pesos) at current exchange rates, with hosiery accounting for 68 percent. The total volume represented an increase of 4 percent against 1992, with a net income before taxes of $11.7 million (37.5 million pesos), down 3.4 percent against the previous year. The company's operating profit last year increased to $36.05 million from $31.97 million, or 13 percent.

Now, when Ballesteros looks at his company's future in the North and South American markets, this is what he sees:

  • Tapping the burgeoning U.S. Hispanic market -- a sector he says will likely surpass the entire Mexican market in purchasing power -- with Grupo Synkro's trademark Dorian Grey pantyhose, its flagship line whose television advertising has helped develop popularity throughout Latin America.

  • Adding to his company's Calvin Klein and Burlington high-end hose labels in the U.S., acquired in the Kayser-Roth deal, by developing a sheer pantyhose under the Hue tights and sock label.

  • Building on its Kayser-Roth acquisition by marketing its 12 styles of No Nonsense hose and socks in Latin America and Canada, where one of its leading customers, Wal-Mart Stores, is also expanding, and to use distribution channels in the U.K. acquired as the result of the Hue acquisition.

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