Mexican retailer Grupo Gigante SAB (Mexico City) has sold its stake in a joint-venture with Radio Shack Corp. (Fort worth, Texas) after failing to agree on an expansion strategy following several months of negotiations.
The $42.4 million transaction makes Radio Shack the sole owner of its Mexican unit, Radio Shack de Mexico.
Gigante selling its stake was one of three options considered as the partners reviewed the joint-venture. Others were an expansion of the electronics goods chain in Mexico and Latin America, or Gigante buying Radio Shack's share of the joint-venture.
“Upon analyzing the different scenarios and conditions put forth, and not having arrived at an agreement allowing (the two companies) to move forward together and expand into Latin America, Grupo Gigante decided to sell,” the Mexican company said.
Radio Shack de Mexico had 186 stores in Mexico at the end of the third quarter.
“Radio Shack de Mexico represents an attractive growth platform for our company,” said Radio Shack chairman and ceo Julian Day. “This is a business we know well through our experience with the joint venture, and the RadioShack brand has strong equity among consumers in Mexico.”
RadioShack will operate the stores and related general office, service center and distribution center in Mexico as a wholly-owned subsidiary. All of the stores and support facilities are leased locations. The stores average approximately 1300 square feet and are primarily located in shopping centers.