Antonio Quevedo
Executive President
Grupo Diniz
View from the Top

Mexican Company Surprises the Entertainment Sector

Sat, 12/01/2018 - 15:21

Q: What elements have allowed ¡Recórcholis! to expand to 22 states since its founding in 1999?

A: We recognized from the start that entertainment was an essential part of every shopping mall and our idea behind ¡Recórcholis! was to provide family entertainment centers within malls. Today you cannot deliver a mall without an entertainment offer. These centers have become areas for socialization. People go to malls not only to purchase goods, but also to eat and to discover entertainment options. Today, the role of the shopping mall could be compared to that played by the central squares in small cities in the last century.

It is important to understand that in recent years malls have begun to lose traffic due to e-commerce. Making purchases of clothes or technological devices over the internet is now much easier. However, you cannot go bowling or ice skating at home. That is why we have become an important anchor for new shopping centers. The oldest shopping centers are also reaching out to us because they have realized that one way to maintain traffic is through the entertainment sector. Over the last 25 years, we implemented a variety of games and models until we found the perfect fit for malls. Today, every ¡Recórcholis! space is built inside a shopping center and all have an average area of between 1,800m2 and 2,200m2.

Q: How do Grupo Diniz’s business units complement each other?

A: Grupo Diniz has two branches: ¡Recórcholis! and ¡Kataplum! The former has five available elements that can be implemented: arcade-style machines, ice rinks, bowling alleys, food and beverages and day care centers. We also host children’s parties. Depending on the size of the mall, we define which of the five areas will be set up. Out of the last 20 ¡Recórcholis! venues we have opened, around 80 percent have all five areas. We also have started our new branch called ¡Kataplum!, which is basically an amusement park. ¡Kataplum! also follows our strategy of having a mall location to help attract more traffic.

Q: What is the company’s relationship with Grupo Danhos to expand the ¡Kataplum! project?

A: ¡Kataplum! is a 100 percent Grupo Diniz investment; Grupo Danhos rents the mall space to us. It is important to note that, in addition to leasing us the space for 20 years, Grupo Danhos provided us with all the possible advantages for the construction of the park. We are already working on ¡Kataplum! II, which will also be located in a mall built by Fibra Danhos in the northern part of Mexico City.

Q: Has the company experienced any slowdown in sales given the general uncertainty the country has experienced?

A: Over the past three years we have had stable sales and when it comes to entertainment in general, we have seen steady growth in recent years. It is important to note that entertainment is always the last link in the chain of needs. When people have less disposable income, they will trim back entertainment costs. Of course, the opposite is also true and we are the first to feel it when the economy is gaining speed because people start having more spending cash. However, Grupo Diniz is sensitive to the exchange rate between the Mexican peso and the US dollar since all our main inputs are imported. Also, around 50-60 percent of the materials used for the construction of our venues depend on the price of the dollar, which includes air conditioners and electric staircases.

Q: What strategies differentiate Grupo Diniz from its competition?

A: Our vision is to continue offering family entertainment without consideration to socioeconomic factors. This means that the ¡Recórcholis! in Interlomas, in the State of Mexico, is identical to the ¡Recórcholis! in other less expensive locations. We have a single standard for all venues and I think that this has been part of our success. In certain lower socio-economic zones, people cannot afford to go somewhere for a vacation and so they regard entertainment offerings as their holidays; this is why we strive to maintain a quality standard regardless of the location.