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News Article

Sanborns Shuts Down Seven Stores Due to COVID-19

By Sofía Hanna | Wed, 10/28/2020 - 08:51

Grupo Sanborns, the chain of restaurants and department stores owned by Grupo Carso, reported the closing of seven of its locations in 3Q20 due to a decrease in sales of 1.3 percent against 3Q19. According to Forbes, five of stores closed were in Mexico, located in Saks Fifth Avenue Polanco, Churubusco, Hipodromo, La Raza and Tepic. The other two were in El Salvador, in Metrocentro and Multiplaza. 

"We were doing fine in online sales and we were surprised when they informed us about this decision. It must be a corporate matter," said the brand manager in charge of Grupo Sanborns in El Salvador, Linda Cabrero, in an article by Forbes. Even online sales have stopped completely in El Savador and users can no longer see the store’s online catalog.

Grupo Sanborns’ message to the Mexican Stock Exchange (BMV) mentioned that in August, most physical stores remained operational. On Sept. 23, the company extended business hours in an attempt to normalize operations and attract customers. The company highlighted that online sales and distribution gained a lot of weight, sales-wise, following the pandemic. Demand for footwear and clothing fell during this period, especially because there was no "going back to school," told Grupo Sanborns to Forbes México. Also, clients nowadays cannot go to the physical store, try on clothes and then buy them due to sanitary reasons, which means online shopping has become the go-to option.

The numbers shown by the company reflect a decrease of 23 percent in 3Q20 in total sales compared to the same quarter last year. Online sales increased fourfold, however. Sales of electronic articles and related articles grew by 75.4 percent due to the new normality of home office and online classes. The company also fared well in its credit-card userbase, with 4.4 million active cards in 3Q20 against the 4.3 million in 3Q19, according to El Diario.

One of the projects Grupo Sanborns had in the pipeline was Sanborns Home & Fashion in Mexico City and an iShop in Tijuana. However, due to the need to shut down seven of its stores, the company announced it is pausing any sort of expansion plans for the time being.

The data used in this article was sourced from:  
Forbes, El Universal. El Diario, Chilango
Photo by:   RayPhotosPerth, Pixabay
Sofía Hanna Sofía Hanna Junior Journalist and Industry Analyst

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