Walmart to sell Mexican clothing chain to El Puerto De Liverpool for $852 mn
11 Aug 2016
Walmart Stores Inc's Mexican unit yesterday struck a deal to sell its Suburbia clothing chain to El Puerto De Liverpool - Mexico's biggest department store chain operator, for about $852 million.
Walmart De Mexico y Centroamerica, also known as Walmex, will sell Suburbia with its 119 stores and real estate for 15.7 billion pesos ($852 million) including debt of 1.4 billion pesos.
Walmex will also distribute an additional 3.3 billion pesos to shareholders in declared dividend and capital reduction after the deal is completed.
As part of the deal, Liverpool will also pay rent to Walmex for all 34 store locations where Suburbia stores stand alongside Wal-Mart stores.
The sale is part of Walmart's plan to streamline its Mexican portfolio and focus on its core retail business.
Walmex had earlier sold its Vips restaurant chain to fast-food operator Alsea SAB for $626 million, and its Banco Walmart unit to Mexican billionaire Carlos Slim's bank Grupo Financiero Inbursa for about $247 million.
Walmex is Walmart's largest chain outside the US with 2,369 stores, including 256 Walmart Supercenters stores and 161 Sam's Club stores.
The Mexican Stock Exchange-listed company was founded in 1952 as Cifra by Jerónimo Arango, and merged in 1991 with Wal-Mart and was renamed in 2010 to Walmart de Mexico y Centroamérica.
El Puerto de Liverpool is a mid-to-high end retailer which operates the largest chain of department stores in Mexico having 17 shopping malls, 85 department stores, 6 Duty Free stores, and 27 specialised boutiques.
The Suburbia deal is the second this year and comes a month after it agreed to buy a stake in Chile's Ripley Corp SA.