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 Business News | August 2006 
Retailer Pushes North
 Jenalia Moreno - Houston Chronicle
| | Famsa chain from Mexico finds growth in the U.S. |
A sign outside the Famsa store on Hillcroft Avenue reads in Spanish: "Your store without borders."
For good reason.
Famsa crossed the U.S.-Mexico border in late 2000 to open its first U.S. store in Los Angeles. Today the chain operates 25 U.S. stores where customers can order deliveries of goods in both the United States and Mexico — from Texas to Tabasco and California to Campeche.
"Six years ago, it was decided that one of the areas of growth for Famsa would be the Hispanic market in the United States," said Ignacio Ortiz, international director for Famsa's holding company, Grupo Famsa.
The publicly traded retail giant was banking on Mexican immigrants recognizing the store from their homeland and buying goods to furnish their homes here and back in Mexico.
"The Famsa brand is very recognizable by the Mexican market because they have been in Mexico for so many years," said Ortiz as he walked through one of the company's two stores in Houston.
In 1957, Don Humberto Garza opened his first small store in Mexico that later was named Fabricantes Muebleros, or Furniture Manufacturers, and it became known as Famsa. In 1975 the company began to spread across Mexico and now has more than 300 stores there.
Mexican waitress Maria Baños is familiar with the Monterrey-based retailer because there are several locations in Mexico City, where she lived until moving to Houston five years ago.
She recently stopped by the southwest Houston store to examine the ovens sold exclusively for the Mexican market. Manufacturers require that certain models be sold only in some countries, and Famsa officials placed all of the refrigerators, TVs and ovens that can be exported to Mexico in a section of the store bordered by Mexican flags and red, white and green banners, the colors of the nation's flag.
Baños looked at the stoves on display and then some models on the company's Web site. She planned to return to the store and purchase it later. "My mother's birthday is coming up, and I want to give her a stove," Baños said. "When I moved here, her stove was very worn down."
There's a growing number of Mexican retailers in the U.S. that allow customers to buy their products here for delivery back home.
They've realized immigrants have huge buying power and are sending billions in wages home each year. Last year, remittances soared to $20 billion, from $16.6 billion in 2004.
Famsa also participates in that money-sending market with a wiring agency tucked into the corner of its Hillcroft Avenue store.
"It gives the sender more control over how the money will be sent back home," said Manuel Delgado, chief executive of Houston's Reality Hispanic.
Guatemala, El Salvador
Although much of its business is with Mexican immigrants, Famsa is expanding. Earlier this summer, the company began exporting to Guatemala and plans to start deliveries to El Salvador as well.
Salvadoran immigrant Dina Ramirez shopped at five stores before selecting a burgundy sofa, love seat and coffee table at Famsa for her Southwest Houston apartment. The receptionist applied for credit with the company and got the living room set for $1,800 because "it seems cheaper" than other stores, and she liked that the staff was so friendly and spoke Spanish.
Bringing its marketing techniques across the border, Famsa hires disc jockeys every Sunday to play music at one of its Houston stores to entertain customers, who also visit the retailer to pay their bills.
Entertainment
Many immigrants hail from nations with unreliable mail service and they are accustomed to paying debt in person, often visiting the store every month with their families in tow. Back home, they expect entertainment while shopping.
"They like to have that entertainment, that fiesta environment," said Delgado, who has worked on Hispanic marketing programs for retailers such as Best Buy. "It's a destination."
Using such techniques, Famsa reported that U.S. sales accounted for 11.9 percent of its total sales of nearly $1 billion last year.
"It's going very well for them," said Tufic Salem, a Mexico City-based Credit Suisse analyst who follows Famsa. "They're benefiting from Hispanics who identify with the company."
It's going so well that Famsa plans to open another 25 stores in the U.S. by 2010, with two more in the Houston area.
jenalia.moreno@chron.com |
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