Giant Mexican store expanding to Austin

FAMSA lets people buy here, have products delivered in Mexico

Saturday, December 15, 2007
By Shonda Novak

FAMSA, the large Mexico-based electronics, appliances and furniture retailer that caters to Latinos, plans to open a store in Austin in May at U.S. 183 and Ohlen Road.

The store, in a former Albertson's building, will be one of about 385 outlets that the rapidly growing FAMSA chain has in the U.S. and Mexico, where it started in Monterrey more than 25 years ago. About 350 stores are in Mexico, and about 35 are in the U.S., with more than 40 to come in the states in the next four years.

The Austin store is expected to draw shoppers from as far as Marble Falls, said David Simmonds. Simmonds is senior vice president in Austin with the Weitzman Group, a commercial brokerage firm representing the shopping center, to be called FAMSA Plaza.

FAMSA stores are unusual in that they allow customers to purchase goods in the U.S. and then have those products delivered to friends and relatives through an extensive network of Mexico distribution centers.

"This is as exciting as it gets for retail projects oriented around the Hispanic community," Simmonds said. "FAMSA is a great addition to the Austin market and will be a great destination to shop for Hispanic families in our community."

The store will represent a $9 million investment for FAMSA, which includes the purchase of the property, said Robert Mendoza with LRS Real Estate Services Inc., the Dallas-based firm that represents FAMSA in its U.S. real estate transactions. FAMSA will occupy about 36,000 square feet of the 55,000-square-foot building, which will also house other tenants. Simmonds said he is in talks with a local Mexican American store for a 6,000-square-foot location, plus other national and local businesses catering to the area's demographics. The data show a population that is 45.5 percent Hispanic within a mile of the planned store, and nearly 26 percent Hispanic within five miles.

Marco Velasquez, who is part of FAMSA's development team, said the Austin market is a good fit because of its sizable Hispanic population. FAMSA's research shows Central Texas has a Latino population of about 370,000, Mendoza said.

Latinos have grown to be the nation's largest minority group. And for the first time this year, Latino pocketbooks are expected to control more disposable income than any other minority group in the U.S., research shows.

FAMSA's expansion plans focus on the top 25 U.S. metro areas.

Store employees speak Spanish, and the company advertises in Spanish media only, especially on the television station Univision.

Mendoza said FAMSA also runs its business "straight off Hispanic principals," with a heavy emphasis on loyalty.

Customers can work out individual payment plans, and FAMSA takes them at their word on what they can pay per month.

"Having that loyalty keeps them coming back to FAMSA," Mendoza said. He said the default rate on credit payments through the term of the loan is less than 3 percent. "That's unbelievable," he said.

The average store size is 30,000 square feet. Furniture occupies about 60 percent of the floor plan, with the remaining 40 percent split equally between electronics and appliances.

The chain's existing U.S. stores are in California, Texas, Nevada, Illinois and Arizona. There are five FAMSA stores in Houston and six in San Antonio. FAMSA has three stores in the Dallas/Fort Worth area.

In all, about 10 more stores will open in those states in 2008, including two in Texas — one in Austin and one in Waco — Mendoza said. FAMSA has U.S. distribution centers in Houston and Dallas, and is looking for a site in Stockton, Calif.

The first U.S. retail store opened in 2000 in Huntington Park, Calif. FAMSA has started expanding in Northern California, with stores scheduled to open next year in such cities as Oakland, Sacramento, Stockton and Salinas.

Stores are also scheduled for Bakersfield and San Diego, as well as Tucson, Ariz., and Glendale, Ariz.

In 2009 and 2010, FAMSA plans to open 15 to 20 stores in Boston, New York, New Jersey, Philadelphia, Connecticut and Washington.

Those will be followed by 10 or so Florida stores in Tampa, Orlando and Miami that would open in 2010 and 2011, Mendoza said.

"It's pretty aggressive," Mendoza said. "I have my work cut out for me."

Source: Austin American-Statesman