PRICE SMART PULLS OUT OF MEXICO
SAN DIEGO - 02/28/05 - PriceSmart Inc. and Grupo Gigante S.A. de C.V. have decided to close the warehouse club operations of PSMT Mexico S.A. de C.V., a 50/50 joint venture that operates 3 membership warehouse clubs in Mexico.
The three stores in Mexico are in Irapuato, Celaya and Queretaro. They opened in 2002 and 2003.
The joint venture will continue to have real estate assets and is evaluating various business strategies associated with those assets, including leasing, selling or further commercial development of the sites.
"Based on current financial projections, management believes that the closing of the Mexico operation should not result in any significant book loss for PriceSmart," said a company spokesman.
"The elimination of losses from the Mexico operations will have a positive impact on the Company's future operating results," he said.
PriceSmart, headquartered in San Diego, owns and operates 26 US-style membership shopping warehouse clubs in 12 countries and one US territory - four each in Panama and the Philippines; three in Costa Rica; two each in Dominican Republic, El Salvador, Guatemala, Honduras, and Trinidad; and one each in Aruba, Barbados, Jamaica, Nicaragua, and the US Virgin Islands.
The San Diego-headquartered company also licenses 11 warehouses in China and one in Micronesia and recently announced plans to open another outlet in San Jose, Costa Rica, in October.
PriceSmart has about 465,000 membership accounts worldwide - a number that swelled to 500,000 in 2003, when the company offered free memberships to attract new member shoppers.
The firm, which began operations in 1997, reported a loss of $1.9 million on revenue of $156.7 million in the fiscal quarter that ended last November.
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