Tiendas 3B to Go Public on Wall Street

Discount retailer, Tiendas 3B, could launch an initial public offering (IPO) in the United States. According to Bloomberg, the company is working with JPMorgan Chase, Morgan Stanley, and Bank of America on the potential listing. 

Reportedly, the company is working with the three Wall Street banks toward a 1H24 listing, according to Bloomberg anonymous sources. “A final decision has not been made and plans may not progress,” says Bloomberg.

By listing on the US stock market, Tiendas 3B will join companies that have preferred to list abroad instead of on the Mexican Stock Exchange (BMV). According to El CEO, no national company has decided to launch securities on the Mexican stock market since 2018 and some of the companies that preferred to do so in the United States include Maquia Capital and Betterware.

Tiendas 3B is a chain of convenience stores with a business model focused on offering products at lower prices and with constant discounts, following the “hard discount” model. In Spanish, "3B" stands for bueno, bonito y barato (good, pretty, and cheap). The company has more than 1,500 stores in Mexico, following a rapid growth period from 2019 to 2023 that benefitted stores in Mexico with this business model tripling their numbers, according to El Financiero.

Although Mexico has had very few IPOs since 2018, stock sales have rebounded mainly due to subsequent offerings from industrial-owned companies that took advantage of last year's manufacturing boom, reports Bloomberg. The so-called nearshoring trend has also created jobs, which, combined with growing government cash aid programs and higher wages, has driven increased consumption and growth in Latin America's second-largest economy.

Not including Walmart, in Mexico there are 25 supermarket chains affiliated with the National Association of Self-Service and Department Stores (ANTAD). Of these chains, four are listed on the BMV: Soriana, La Comer, Chedraui, Costco, and Walmart.

According to government data, during 2Q23, 871,000 people were employed in Retail Trade in Self-Service and Department Stores, 49.6% men and 50.4% women, with an average monthly salary of MX$5,690 (US$335). Most of these jobs are concentrated in the State of Mexico, Mexico City and Nuevo Leon.

In 2Q23, Retail Trade recorded a gross domestic product of MX$2.92 billion, showing a drop of 10.5% compared to the previous quarter and an increase of 14.8% compared to the same period of the previous year.