KMART SELLING ITS MEXICAN STORES
Byline: Diane E. Picard
NEW YORK — Taking a sharper focus on its core locations in the U.S., Kmart Corp. is selling its stores in Mexico, which it has operated in a joint venture with El Puerto de Liverpool, for $148.5 million.
Controladora Comercial Mexicana, Mexico’s second-largest retailer, has agreed to purchase Kmart Mexico, which includes three stores in Mexico City, one unit in Cuernavaca and a fifth site that is scheduled to open in Puebla by early summer. The deal is expected to be closed in April.
For 30 days after the sale is completed, the Mexico units will be operated as Kmart stores, said a spokeswoman for the Troy, Mich.-based discounter. During that time, Kmart and CCM may negotiate a licensing agreement, enabling CCM to continue operating the sites under the Kmart banner.
Kmart already has such a license with Coles-Myer in Australia, which operates several stores — formerly part of joint venture — under the Kmart name.
Last May, Kmart sold 13 stores in the Czech Republic and Slovakia, and last summer it said it would cease operating three units in Singapore.
However, the spokeswoman told WWD Kmart plans to retain its 125-unit Canadian division, which it runs as part of the domestic business.
It will also hang onto 22 sites in Puerto Rico, two in the U.S. Virgin Islands and one in Guam.
In 1996, sales at Kmart’s international stores fell 14.4 percent to $1 billion — or less than 5 percent of the company’s annual sales of roughly $38 billion.
“We want to make the domestic business as strong as we can,” a Kmart spokeswoman said, adding that the retailer would consider global growth in the future. “For now, we are concentrating on our traditional U.S. Kmart discount stores and Super Kmart Centers.”
Kmart still has a long way to go to restore robust growth at home.
For the nine months ended Oct. 30, Kmart narrowed its loss to $56 million after special items on sales of $23.7 billion. A year earlier, it lost $151 million after special items on sales of $23.8 billion.
Kmart stock inched ahead 5/16 to 11 3/16 on the New York Stock Exchange Friday.
CCM retails groceries and perishables, general merchandise and clothing under five retail formats. It also has family-style restaurants and holds a 50 percent stake in Price Club Mexico, a joint venture that operates Price/Costco units in Mexico.