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Grupo Carso: its strategy to face the Covid-19 pandemic

Grupo Carso carried out a series of measures to face the Covid-19 pandemic, such as closing stores, imposing online businesses, controlling expenses, reducing investments and changing store formats.

From March 31 to June 15, 2020, all Sears and Saks Fifth Avenue stores were temporarily closed to the public.

Also temporarily, Sanborns closed 96 stores and 22 Sanborns Café, while the rest continued to provide essential products and services in the pharmacy, pharmacy and telecommunications departments.

In compliance with sanitary measures, the operation of the iShop stores was variable depending on the city and the restrictions in the shopping centers.

Dax stores continued to operate as they were self-service stores. The Loreto and Plaza Inbursa shopping centers closed temporarily, keeping only the restaurant service under the option of selling prepared food and take away drinks.

At the same time, the sale and service to its customers continued through digital stores.

Grupo Carso 

During 2020, 11 Sanborns stores in Mexico and 3 stores in Central America were closed.

In addition, the Saks Fifth Avenue store in Plaza Carso was closed and replaced by the Sanborns Home & Fashion format.

Also towards the end of December, a Sears department store was closed in the city of Monterrey.

On the other hand, the opening of 3 iShop was carried out.

In general, the short-term strategy of Grupo Sanborns to face this emergency consisted of boosting online business, offering all the products that any customer could find in a physical store, due to the health emergency, which it was affecting the rest of the formats that had to be closed temporarily to guarantee social distancing.

This phase had its most important manifestation in the months of April and May, although in several states of the Mexican Republic it even extended until June and July.

Then the reopening was carried out in a limited way, always following the protocols indicated by the respective authority, making those adjustments and logistical preparations, to guarantee appropriate hygiene conditions, both in the stores to receive their customers again, while continuing to strengthen the sale through digital channels.

A cost control was carried out without affecting the image and the service, the main savings were observed in sales expenses related to rents, lower consumption of electricity and payment of bank commissions. In administration expenses, savings were observed due to lower expansion expenses and payment of fees. Additionally lower advertising, promotion and depreciation expenses. To date, it continues to implement additional measures to reduce general expenses.

Other measures

In a difficult year 2020, Grupo Carso’s consolidated sales reached 94,684 million pesos, 7.6% below 2019.

This reduction is mainly explained by the performance of Grupo Sanborns, which represents 41.8% of total revenues and which fell 25.7% mainly due to the temporary closure of stores from March to June 2020 to attend the health emergency due to the pandemic.

Profile

Grupo Carso is one of the largest and most important conglomerates in Latin America. It controls and operates a wide variety of companies in the Commercial, Industrial, Infrastructure and Construction and Energy branches.

Its main subsidiaries are:

Grupo Sanborns, a subsidiary that participates in the commercial sector made up of 439 points of sale, as described below: a chain of 153 establishments with restaurant and store operations, under the Sanborns concept, 1 Sanborns Home & Fashion, 22 Sanborns Café , 45 Mixup music stores, 94 iShop stores, 97 Sears department stores, 1 El Palacio de los Perfumes boutiques, 25 Dax stores, 1 Saks Fifth Avenue, as well as 2 shopping centers.

Grupo Condumex, the Company’s industrial subsidiary, under which they concentrate: the manufacture and commercialization of products and services for the construction and infrastructure, energy, automotive, telecommunications and mining markets.

Carso Infraestructura y Construcción, a subsidiary that participates in the infrastructure and construction sector through four sectors: Installation of Pipelines, Manufacturing and Services for the Chemical and Oil Industry, Infrastructure Projects, Civil Construction and Housing.

Carso Energy, a subsidiary that participates in the activities of the hydrocarbon industry, in the exploration, location, production, exploitation, transportation, purchase and sale of all types of hydrocarbons and minerals, in the provision of natural gas transportation services, in the exploration, production and exploitation of geothermal energy, as well as the operation of hydroelectric plants.

To conclude, Grupo Carso has top-level strategic partners.

Global companies with high recognition in their field participate with the Group in some sectors, such as Aptiv in the automotive sector and Sears Roebuck USA in the commercial sector, among others.

 

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