Liverpool used pandemic-era cash to reduce debt to below 2019 levels. While Banco Santander recently described the store as facing possible revenue declines from inflation, they noted the company adapted well during the pandemic and is "well-positioned to continue being the department store leader in Mexico." Financials The company has a AAA(Mex) rating as of June 2022 by Fitch, which estimated an 11% revenue growth in 2022 and 5% in 2023 assuming a recession. While as of August, they still planned to open seven new Suburbia stores and two new Liverpool stores in the second half of 2022, their investor day presentation emphasizes the logistics network and renovations to existing stores to make them more "sticky" and experiential. That said, management is comfortable getting defensive. When the company announced the Nordstrom purchase in September, a Liverpool press release called it "an attractive opportunity to diversify assets geographically." Even if a recession slows growth, the PLAN reduces the possibility of excess merchandise at stores. This "PLAN" (Plataforma Logística Arco Norte) would connect warehouses across the country to support new and existing stores. Through acquisitions like Central American furniture maker Regal Forest, he's expanding the company into a pan-Latin America brand.Ī recession would undoubtedly impact expansion, but management has so far kept pace with timelines on their logistics network. Guichard G., stepped into the role in 2015 after having been with the company since 2000. companies on tech initiatives like same-day delivery and ordering online for in-store pickup, but the pandemic has forced them to catch up. In addition to the Liverpool brand, the company manages commercial real estate, 124 specialized boutiques, 165 Suburbia stores, and a credit system through a partnership with Visa. Today, with 15 million unique customers and 122 stores, they're the largest department store in Mexico. Good leadership and a strong brand got them through the peso devaluation of the 1990s, and by 2015 they had 100 locations across the country. In the 1980s, the company spread to other parts of Mexico. Accomplishments like being the first Mexican business to have escalators seem quaint today, but they show how long Liverpool has been a favored Mexico City brand. It has an essential place in the history of Mexican business. Liverpool started in Mexico City in the 1840s. But in general Mexico's middle class is growing, and in places like Mexico City the middle class represents about 58% of the population.
At about 42%, Mexico's middle class is smaller than the Organization for Economic Development and Cooperation (OECD) average, and the pandemic was brutal to the middle class. Twenty-five percent of Mexico's population is under 15, making it primed for growth. The Nordstrom board adopted a poison pill that will prevent a takeover for the time being, though they say it has nothing to do with Liverpool's stake and are not opposed to a buyout).īut even if Liverpool stays in Mexico, the Mexican market should reward them. Liverpool is growing beyond Mexico they purchased a furniture business in Central America and acquired a 9.9% stake in Nordstrom ( JWN) announced in September. As the company has already developed the central hub in central Mexico, the network seems feasible even if a recession slows expansion efforts. Their expansion plan includes an enhanced distribution network to fill online orders faster, lower the cost of goods sold and allow the stores to keep less inventory on hand. With four quarters of positive earnings surprises and an expansion effort that should reduce costs of distribution, the company can survive a recession and thrive in the years after. Though a recession looms over consumer cyclicals, Mexican-based department store El Puerto de Liverpool (known by their department store brand name Liverpool) has weathered economic turbulence in the past. While the pandemic has affected them, their recent expansion efforts seem to be succeeding. They've had four quarters of positive earnings surprises. Click here to find out more » ThesisĮl Puerto de Liverpool ( OTCPK:ELPQF) (LIVEPOL1.MX) is a popular Mexican department store that is undervalued from an EPS perspective.
#Liverpool suburbia mexico free#
Active contributors also get free access to SA Premium. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Editor's note: Seeking Alpha is proud to welcome Zachary Lindsey as a new contributor.
0 kommentar(er)
