April 2, 2008 / 10:24 PM / in 9 years

Mexico's Soriana sees modest Q1 sales

2 Min Read

<p>Aurelio Adan Chief Financial Officer of supermarket chain Soriana smiles during his participation in the Reuters Summit in Mexico City April 2, 2008.Andrew Winning</p>

MEXICO CITY (Reuters) - Soriana, Mexico's second-biggest retailer, sees same-store sales rising modestly, by more than 1.2 percent, in the January-March period and expects to launch a $1.4 billion debt issue next month.

"We started to feel a certain slowdown in consumption in the fourth quarter of last year and in the first quarter of 2008 we have not noticed an improvement in consumption," Chief Financial Officer Aurelio Adan told the Reuters Latin America Investment Summit on Wednesday.

Mexican retailers have been greatly hurt by the downturn in the U.S. and Mexican economies. Last year, retailers' same-store sales rose barely 1 percent.

Soriana (SORIANAB.MX), based in the northern city of Monterrey, will use the issue to refinance a loan it used last year to buy over 200 stores from rival Gigante (GIGANTE.MX).

The company expects to repay 30 percent of the $1.4 billion in 12 months to 16 months after it is issued.

Soriana will slow down its organic growth for the next two years as it digests the acquisition of 198 Gigante stores in Mexico and seven more in the United States.

But starting in 2010, the company looks to open an average of 60 stores per year and would even consider expanding into Central America, Adan said.

Soriana shares fell 0.71 percent on Wednesday to close at 32.25 pesos.

(For summit blog: summitnotebook.reuters.com/)

Reporting by Cyntia Barrera, Gabriela Lopez and Vanessa Padilla; Editing by Gary Hill

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