Old American Store Brands Don't Die, They Just Move on to Mexico Bloomberg Business
go to original July 19, 2015

Forgive a US visitor for feeling lost in a time warp.

Mexico City's trendy Roma neighborhood is dotted with Blockbuster, Sears and Woolworth stores, along with art galleries and sidewalk cafes.

The American chains - extinct or barely hanging on in the US - are getting an afterlife from Mexican billionaires and other investors who look past the mustiness and see profits.

Ricardo Salinas Pliego's Grupo Elektra paid US$31 million in 2014 for 300 Blockbuster stores in Mexico, just as the US business collapsed into a shell of its former self with nothing more than an online streaming service. Woolworth, whose last US shop closed in the 1990s, plans three new locations in Mexico next year. Sears in Mexico, controlled by Carlos Slim's Grupo Sanborns, will open five new stores in 2015; last fiscal year, its US namesake closed 61.

All this shows that there's money to be made from Mexican consumers who still have positive associations with American brands. While Blockbuster as a date-night destination went the way of the VHS tape in the U.S., Mexicans still flock to rent video games the old-fashioned way. Retail brands have a longer shelf-life because they don't face as many competitors, and fewer people buy online, according to Juan Martinez, the president of research firm Superbrands Mexico.

"There's not the same pressure," Martinez said from Mexico City. "There are many brands that can survive a little longer in Mexico than in the US."

Read the rest at The Straits Times

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