Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/122387
A Mexican retailer engine Private equity funding can be the magic ingredient for franchis- Nexxus' funds stem ers. Mexico's Taco Holding has the franchise rights in that country mostly from do- for Sbarro and Krispy Kreme, and it owns outright the Arrachera mestic and foreign House Mexican food chain, the Sixties Burger brand, the Café institutions. Diletto coffee shops and New Gelato. In all, the company owns Nexxus' port- 320 stores. Nexxus Capital, which owns 84 percent of Taco, has folio also includes helped fuel all this growth. Nexxus, Mexico's largest independent nearly 30 percent private equity firm, has three active retail funds that together ac- of specialty re- count for 30 percent of its overall investment portfolio. tailer Modatelas, "Retail's cancer is having bad stores, and retailers need not only a 240-store crafts Nexxus capital serves doNuts, too. capital, but also support, to grow in an orderly fashion," said Roberto chain. Another Terrazas, a managing director of Nexxus. "Securing long-term com- investment is Moda Holding, which operates 150 stores across petitive financing is challenging for Mexico's medium-size firms, so various chains, including shoe retailers Dorothy Gaynor and NPI, opportunities for private equity funds abound in the retail market." and swimwear chain Zingara. includes Taco Holding and some fashion retailers. Brazil's Gávea Investimentos (in which JPMorgan Chase holds a 55 percent stake) has investments in the likes of men's apparel chain Camisaria Colombo and sunglasses vendor Chilli Beans. Gávea's past investments include Arcos Dorados, McDonald's largest franchiser in Latin America; Raia, Brazil's biggest drugstore chain; and two of Brazil's main mall developers, Aliansce Shopping Centers and Multiplan. Also in Brazil The Carlyle Group holds stakes in furniture retailer Tok&Stok; and toy seller Ri Happy Brinquedos. Gávea iNvestimeNtos is GrowiNG chilli beaNs iN brazil. 236 SCT / M a y 2 0 1 3 — MBP "Private equity funds are beginning to become a clearly important part of the financial market in Latin America," said Meyn. "It's growing and is now in the minds of corporate owners." The Latin American retail market is a natural target for private investments, given that its economic growth is driving firms to expand faster, Meyn says. Investments in heavy industry and the extraction of raw materials are still attractive, but most of those products are for exports, he says. "You better have an advantage when it comes to costs and quality to compete on a global basis," he said. "Industrial firms may offer higher margins to investors, but their respective industries' regulatory environments often make these investments more complicated," said Alejandro Gómez, manager of administration and finances at Peru's Iasacorp, which owns several retailers, including the DoIt jewelry chain. "Retail is a friendlier industry." For retailers, these alliances go beyond an injection of low-cost capital. "One thing is financing, the other is a private-equity fund that becomes a partner ó helping to implement a corporate governance, as well as in relations with banks, business networking, the hiring of highly capacitated managers, et cetera," said Roberto Terrazas, managing director of Nexxus