MEXICO CITY — Loss-making Felix Maduro, which Panama’s Grupo Wisa was forced to sell as part of a stinging U.S. money-laundering probe, plans to open six stores and hit $120 million in revenues by 2020, its new owner told WWD.
“The goal is to open two stores a year to have 13 in three years,” said Jorge Faraj, co-owner of FBM Retail, a holding company established to buy the leading department store chain for $60 million last November. Panamanian drugstore operator Grupo Arrocha seized control by purchasing 51 percent of FBM’s shares. Diunsa, which runs “mini-Wal-Marts” in Honduras, bought the other 49 percent, according to Faraj, who is Diunsa’s chief executive officer.
The acquisition came nearly two years after Wisa bought 140-year-old Felix Maduro for $74 million to expand it in Central America’s largest economy, just as its leading apparel franchising business and perfumery chain La Riviera was flying high, not to mention banking and other trade businesses.
But those plans went south in May when the U.S. Treasury’s Office of Foreign Assets Control charged Wisa’s owner and president Abdul Waked and nephew Nidal Waked with laundering funds for drug cartels.
The ongoing probe has impacted the group, which is also scrambling to sell its crown jewel, Panama’s luxury Soho Mall.
As Wisa crumbled, FBM saw an opportunity to clinch a prized asset at a deep discount. They engaged U.S. investment bank Darwin Capital to place offers against several bidders.
“EBITDA was negative,” Faraj said, referring to earnings before interest, taxes, depreciation and amortization. “We bought the name and the market opportunity. Felix Maduro is one of the country’s most valuable brands along with the Panama Canal, Arrocha and Café Duran.”
Now that Felix Maduro is off the “Clinton list” of launderers banned from doing business with U.S. entities, Faraj and Arrocha’s Vallarino owner family will work to gradually lift EBITDA and revenues to $15 million and $120 million by 2020, respectively, according to Faraj.
Felix Maduro’s best-selling labels include Michael Kors, Polo Ralph Lauren and Tommy Hilfiger, with apparel comprising 50 percent of revenues, said Faraj.
Chanel and Estée Lauder dominate the beauty aisle while the firm also runs a separate perfumery store called Felix Beauté.
Next year, Felix Maduro plans to spend $20 million to open an 85,000- and 65,000-square-foot store in Panama City’s Alta Plaza Mall and in the growing Costa del Este residential district, respectively.
Faraj said Felix Maduro targets B and C-level consumers in Panama where gross domestic product is set to surge 5.4 percent next year, outpacing Central America’s expected growth of 4 percent and Latin America’s 1.5 percent projection, which will see the region emerge from recession, at least according to think tank Cepal.
The promising outlook should help the newly acquired chain boost its fortunes, though it faces tough competition from archival Stephens.
Felix B. Maduro will also tap the international arena after 2020 with Costa Rica and Honduras possible destinations for future stores.
Next year, he plans to open two shops for six-strong Diunsa, which he described as a “mini-Wal-Mart” with a small clothing department but no private labels. The chain’s main competitor is Carrion, which has a larger apparel assortment.