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Mexican billionaire puts his money on Circuit City
AP Photo
Circuit City filed for Chapter 11 bankruptcy protection and cut more jobs last week. It has posted losses in seven of the past eight quarters.
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Published: November 19, 2008
RICHMOND - A Mexican billionaire who owns a large stake in Circuit City Stores Inc. says he believes that there is great market opportunity in the company, even though it is under bankruptcy protection, a spokesman said yesterday.
Ricardo Salinas Pliego, who is on Forbes magazine's list of the world's richest people, is "banking on a great trademark, which is Circuit City," said Luis Nino de Rivera, a spokesman for Grupo Salinas, a conglomerate that controls television, retail and cellular businesses in Latin America.
"That's a very important name in the retail industry in the United States and it has great value.... There's a great market opportunity here that certainly has to be looked at in detail," Nino de Rivera said in an interview with The Associated Press.
Salinas owns a 28 percent stake in Circuit City, the nation's second-largest consumer electronics retailer, after buying more than 47 million shares.
The transactions, which make him the company's largest shareholder, occurred both before and after Circuit City filed for Chapter 11 protection last week. Salinas has not yet filed the Securities and Exchange Commission form required of those who hold more than a 5 percent stake in a company.
Salinas' family has been involved in the retail industry for the past 100 years, Nino de Rivera said.
Among Salinas' businesses is Grupo Elektra, which operates more than 1,000 stores that sell electronics, furniture and appliances.
"Circuit City is right in line with that experience and with his family tradition," Nino de Rivera said. "He is furthering his investments in a business he knows very well."
He did not rule out a possible bid for the company, but said that at this time Salinas has not been in communication with Circuit City and is not formally reviewing the company's finances.
Circuit City, facing pressure from its vendors and from consumers who aren't spending, filed for bankruptcy protection last week and cut more jobs. It has posted losses for seven of the last eight quarters, and plans to keep operating while it develops a reorganization plan to deal with significant declines in traffic and heightened competition from rival Best Buy Co. and others.
Salinas also controls TV Azteca SA, Mexico's No. 2 broadcaster; Banco Azteca, one of Mexico's largest microlenders; and Grupo Iusacell SA, Mexico's third-largest mobile-phone company.
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