MEXICO CITY — Coppel, Mexico’s largest department-store network, expects apparel revenues will rise 20 percent this year and that it will ring in  2016 with 80 new stores following its spring acquisition of rival Viana, a company spokesman said.

“Our same-store sales are showing a 20 percent gain and should make up 20 percent of our business,” said a company spokesman, without disclosing precise figures.

Last year, the retailer, which caters to Mexico’s low-income segment, posted profits of 9 billion pesos, or $537 million at current exchange, on revenues of 85.5 billion pesos, or $5.1 billion.

In 2015, turnover is expected to rise 10 percent, matching a similar gain in 2014, according to reports quoting Coppel’s president and general manager Agustin Coppel, who has amassed a $16 billion fortune with his brothers by extending long, yet high-interest credit to working-class Mexicans. The firm is also expanding in Brazil and Argentina, where it operates 14 and 17 stores, respectively.

Including the 80 doors, Coppel will finish 2015 with roughly 1,280 stores across Mexico, consolidating its status as the leading department-store network ahead of Liverpool, Sears Holdings Corp. and El Palacio de Hierro.

The Viana purchase for an undisclosed sum gave the firm 18 new doors in Mexico’s capital and a greater presence in Central Mexico, including growing cities like Querétaro, Puebla and Leon. The deal is seen boosting revenues 6 percent and head count to 2,500.

Under the purchase, Coppel will also invest some $150 million to gradually integrate and re-brand 51 unprofitable Viana stores into the Coppel network.

Viana saw sales plummet after failing to issue enough credit to customers, something rivals concede Coppel has pioneered, helping propel its growth in Mexico, where it has 12 million store cards for customers, who buy 75 percent of merchandise on credit.

The firm has also gained a leg on competitors through special collections and savvy product rollouts, with the latest being the J.Lo by Jennifer Lopez line. The collection features dresses jackets, blouses, pants and jump suits retailing from $10 to $60. It also includes accessories and J.Lo perfumes.

Coppel and Global Brands Group teamed to roll out the range exclusively in Mexico, supported by an ad blitz where the Hispanic-American singer and actress is featured in huge outdoor displays across Mexico City. A TV spot also shows the star sketching and modeling several dresses in a studio.

Coppel will outpace Mexico’s department-store market’s forecast of  6 to 7 percent growth this year, which compares with growth of 3 to 4 percent in 2014, said Standard & Poors retail analyst Sandra Tinoco.

“The market is still doing well and consumption remains strong,” Tinoco said, adding that Mexico’s GDP will close 2015 with 2.3 percent growth. Next year, trading may toughen amid lingering uncertainty regarding Mexican interest rates and inflation.

But Coppel, based in Culiacán in Northern Mexico, could ride out the storm, she noted, adding that it is well-managed, traditionally delivering stronger revenue and profits than rivals.

 

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