PriceCostco Abandons Deal for Mexico Stores
The peso devaluation has disrupted the plans of at least one American retailer: PriceCostco, the Kirkland, Wash.-based warehouse store operator. PriceCostco and Price Enterprises have abandoned efforts to sell their combined 50% stake in their 11-store Mexican chain to their joint venture partner in Mexico.
The partner, Controladora Comercial Mexicana, intended to buy that 50% share but was unable to complete the transaction when the value of peso began to slide in December.
PriceCostco said it will send additional management to Mexico to help operate the chain. PriceCostco also is negotiating to buy Price Enterprise’s 26% share of the Mexican enterprise.
Price Enterprise was spun off from PriceCostco on Dec. 21 and has since become a separately traded company, based in San Diego.
Since the peso devaluation, PriceCostco has significantly reduced merchandise shipments to its Mexican enterprise as it assesses demand for goods that will now cost more in that country, said Richard Galanti, the company’s chief executive.
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