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Wal-Mart Slates Move Into Brazil, Argentina

FAYETTEVILLE, Ark. -- Wal-Mart, Inc. plans to open Sam's Clubs and Supercenters in Brazil and Argentina by 1995, company officials said Friday at the retailer's annual shareholders meeting.<BR><BR>In Brazil, Wal-Mart has entered into a joint venture...

FAYETTEVILLE, Ark. — Wal-Mart, Inc. plans to open Sam’s Clubs and Supercenters in Brazil and Argentina by 1995, company officials said Friday at the retailer’s annual shareholders meeting.

In Brazil, Wal-Mart has entered into a joint venture with that country’s leading discounter, Lojas Americanas, which has 89 stores. Lojas Americanas had 1993 sales of $1.083 billion. Apparel accounts for 20 percent of sales.

Wal-Mart, the largest retailer in the United States, with $67.34 billion in 1993 sales, will hold a 60 percent interest in the venture.

The first store will open in Sao Paolo, Brazil, by this year. The company did not say whether it would be a Sam’s Club or Supercenter.

Also this year, a Supercenter and Sam’s Club will open in Buenos Aires with two more clubs in undisclosed locations in the country.

The company is moving independently into Argentina, which Bob Martin — president and chief executive officer of Wal-Mart’s international division — said was due in part to the availability of real estate.

Martin said Wal-Mart has no plans to open any of its traditional Wal-Mart discount stores in the two countries.

“We think the clubs and Supercenters are the easiest and best formats,” Martin said, noting that the two retail concepts are new to South America.

He declined to forecast expansion plans in either country or other locations in South America.

The marriage of Wal-Mart and Lojas has been percolating since 1982, when a group of Brazilian investors bought the South American chain. Lojas chairman, Carlos Sicupira, wrote to the late Sam Walton, Wal-Mart’s founder and chairman, about the new acquisition.

The companies have been in touch ever since, said Walton’s son Rob, who is Wal-Mart’s chairman.

For their part, officials at Lojas view the partnership as a natural.

“We have been doing what Wal-Mart does in our country for 65 years,” said Sicupira, who attended the meeting. “We think that with Wal-Mart’s knowledge and support and our knowledge of the market, we will do well.”

Wal-Mart’s step into South America follows its first international move in 1992, a joint venture with Mexico’s leading discounter, Cifra S.A.

Last week, that partnership opened its third Mexican Wal-Mart Supercenter, bringing to 25 the number of stores jointly operated.

This year, another 35 to 40 Mexican stores are scheduled to be added, with 100 stores opened by the end of 1995.

Earlier this year, Wal-Mart, which operates 2,473 stores, filled out its North American portfolio with the purchase of 122 Woolco stores in Canada for $335 million.

Wal-Mart ceo David Glass said that acquisition and the purchase of 99 Pace Clubs from Kmart Corp. were responsible for the chain’s 6 percent same-store sales growth for the fiscal year ended Jan. 31.

The chain previously had double-digit same-store sales increases, with the exception of 1986, which posted a 9 percent hike.

Glass, noting that net sales continue to climb, said Wal-Mart’s acquisitions and expansions will hold the company in good stead in the long term.

He projected sales for the current fiscal year at $84 billion.

In addition to its international plans, Wal-Mart plans to open 110 new Wal-Mart stores, 20 new Sam’s Clubs and five Wal-Mart Supercenters in this country.

There are also plans to renovate an additional 65 old Wal-Mart stores into Wal-Mart mega food and general merchandise Supercenters, which officials label the chain’s fastest-growing store format.

Regarding merchandising plans for its roughly 2,000 Wal-Mart discount stores, officials said the company will increase the space for all apparel, with a special emphasis on children’s.

According to recent financial statements, 27 percent of Wal-Mart’s sales come from soft goods, which includes apparel and linens. There is no breakout for apparel. By comparison, the chain’s competitors derive 30 to 35 percent of their business from apparel.

Typical of Wal-Mart annual meetings, this year’s gathering was more entertainment extravaganza than business conference. About 13,000 people — mostly sales associates — crowded into the Bud Walton Arena at the University of Arkansas.

Outside the arena, members of the United Food and Commercial Workers Union staged a protest against Wal-Mart’s lobbying in opposition to the administration’s employer-mandate health care plan.