Grupo Elektra buys department store chain

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MEXICO CITY--Grupo Elektra wonthe auction for a 94% stake of retailer Salinas y Rocha with a bid of $77.7 million.

Elektra sells furniture and appliances, often on installment plans, via hundreds of stores throughout Mexico. It is owned by TV Azteca Chairman-CEO Ricardo Salinas Pliego, whose great-grandfather founded the Salinas y Rocha chain.

One of Mexico's oldest stores, Salinas y Rocha had fallen victim to the 1994 peso devaluation and was taken over by its creditors and the government. The chain consists of 86 traditional stores, which sell furniture and appliances, 10 department stores, 21 grocery-type stores and three distribution centers.

Elektra says it plans to sell the department stores and other businesses not considered core operations. It will continue to operate the other stores under the Salinas y Rocha name, noting the chain will complement Elektra's existing operations since it serves a different segment of the market.

Elektra runs a clothing-store division, Hecali, which also focuses on the low-end mass-market consumer.

Grupo Carso, the holding company of billionaire Carlos Slim, is believed to be a likely candidate to purchase the department stores. Carso was the only other bidder in the Salinas y Rocha auction. Its retail interests include the Sanborn's specialty stores and Sears in Mexico.

Copyright March 1999, Crain Communications Inc.

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