EconomyFinancialiShop already sells more than Sanborns: is it the...

iShop already sells more than Sanborns: is it the new jewel of Carlos Slim's retailers?

iShop Mixup, the Grupo Sanborns format that markets Apple-branded technological products, not only maintains the positive inertia that the pandemic gave it, when phones and computers became the only means of work and social interaction in the midst of confinement, but also which was positioned as the second source of income for Carlos Slim’s company, which also includes Sears, Sanborns stores and cafeterias, as well as Dax and Saks Fifth Avenue.

In 2019, the year before the pandemic, Promusa (a division of Grupo Sanborns that groups Mixup and iShop) generated 20% of revenues, Sanborns 25.3%, Sears 47.1%, and the remaining 7.6% came from other businesses, according to with company data.

But with confinement, the need to have tools to be able to work or take classes at home (such as laptops, tablets, cameras and microphones), was key to giving the concept a boost, and with it their income. In 2020, Promusa was the division that recorded the smallest drop in sales during the year, in part because iShop stores remained open as they were considered ‘essential’ for selling telecommunications products, such as computers and phones, and offering repair services. of electronics.

These needs continue and could make iShop one of Slim’s star companies, which also participates in sectors such as energy, infrastructure, banking and telecommunications.

“Both in iShop, and within our own Sanborns and Sears stores, the electronics and white line categories have had significant growth,” said Patricio Slim, the company’s general director, during a call with analysts. “(But) iShop has almost a 90% increase in sales,” he detailed.

At the end of the first quarter of this year, the format generated 30% of the 13,499 million pesos reported by Grupo Sanborns. This percentage exceeded the contribution of Sanborns, equivalent to 27%, but was still below Sears, which has a 42.5% stake. The remaining 0.5% of revenues came from other businesses.

While Grupo Sanborns had to close 16 Sanborns stores permanently in 2021, in the first quarter of the year, the group opened one store under the iShop rubric, in Tulum, Quintana Roo.

Carlos Hermosillo, an independent stock market analyst, comments that one of the catalysts for sales in iShop stores is that they sell Apple products. And it hasn’t been the only thing, as the company has also transformed Mixup’s product offering towards younger consumers, such as those in entertainment. “These are high-growth niches in consumer activity trends today,” he said.

A more profitable business

The iShop Mixup stores have been transformed, and have shown their strength. And for the specialists, what is remarkable about the format is that they have shown good results, even with fewer stores than Sanborns. Today there are 143 branches, a smaller number of stores compared to Sanborns, which has 194 units.

“Mixup has been a very successful case of adaptation, from a niche that died due to the migration of music from physical to digital formats, to this new format. It seems to me that the change of image, layout and attention in the stores, unlike what we can say about Sanborns and Sears, which have been less radical in their physical adjustments”, says Hermosillo.

The good performance of iShop was reflected in the general results of Grupo Sanborns, which closed the first quarter of 2022 with an increase of 17.6% in its income, which amounted to 13,499 million pesos, according to the data of the report sent to the Mexican Stock Exchange (BMV).

“iShop Mixup is generating income for Grupo Sanbors. (The format) is keeping the company in the green,” says Julián Fernández, head of stock market analysis at Bursamérica. “What I see is that iShop will possibly become the star brand of Grupo Sanborns, as long as the group strengthens it in the right way,” he concluded.

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