Grupo Axo is sharing its growing slice of the Mexican retail market with private equity firm Evercore Mexico Capital Partners, which acquired a 20 percent stake in the fashion operator.
This story first appeared in the January 11, 2011 issue of WWD. Subscribe Today.
Evercore, which manages more than $190 million and is part of advisory firm Evercore Partners, did not disclose the size of the investment.
Mexico City-based Grupo Axo — which saw revenues jump 30 percent last year and expects another 25 percent rise this year — manages 11 brands in the country, including Coach, Emporio Armani, Marc Jacobs, Thomas Pink and Tommy Hilfiger. Payless ShoeSource and Sephora will be added to the portfolio this year. The company tries to mirror a brand’s international pricing, excluding the varying effects of taxes. It plans to open stores in five new malls this year, taking advantage of a retail commodity the U.S. sorely lacks: new developments.
Axo was founded in 1994 by Alberto Fasja and Andrés Gómez, who lead operations as co-chief executive officers. The company has more than 100 stores and more than 1,500 shop-in-shops.
“We really were not looking for a financial partner, but we’ve had a long relationship with Evercore and are confident they can help us grow our business,” said Fasja. “An [initial public offering] is something we have considered, but any such step is likely well into the future.”
The firm, which Fasja said is the largest fashion advertiser in Mexico, is first and foremost a brand manager with a long-term view.
“If we sign on, we sign on for life,” said Gómez, who has an easy give and take with Fasja after years together at the helm.
“We try to replicate what they do in the U.S. and internationally,” Gómez said. “That’s what the brands are looking for: someone who takes care of the image of what they are.”
Brands also want room to grow and Mexico provides that, even if headlines on the country are often dominated by drug-related violence.
“It doesn’t help us,” said Gómez of the country’s drug issues. “But the numbers proving the growth of the retail market in Mexico are there. Mexico is steady, it’s growing. That’s the story of Axo — we are growing. New malls are developing. The companies are looking for new opportunities because the U.S. is not going to grow like they want.”
Alfredo Castellanos, managing director of Evercore Mexico Capital Partners, said the growth rate of commercial space in Mexico is set to outpace expansion in the general economy.
“There’s a significant underpenetration of malls in Mexico,” he said. “There is no other brand manager in Mexico that compares. The company has a position of privilege within its markets. Size and scale matters [in Mexico] and matters a lot.”
The infrastructure the company has built up could become even more important following the elimination of costly tariffs on Chinese-made apparel later this year. That change could open up the market to a host of offerings that are currently not economically feasible.
Castellanos and Pedro Aspe, co-chairman of Evercore Partners, will join the company’s board.