News Column

Hispanic Retailers Prove to be Productive

June 2007, HISPANIC BUSINESS Magazine

Derek Reveron

Napoleon Barragan, CEO of Dial A Mattress Operation.
Napoleon Barragan, CEO of Dial A Mattress Operation.

Productivity was down for most of the sectors in this year's Hispanic Business 500, but retail served as a glaring exception.

The top Hispanic-owned retailers who returned surveys combined for an 84 percent spike in productivity from $114,782 per employee in 2005 to $211,327 in 2006. The only other sectors reporting increases were manufacturing (9.3 percent) and finance (9.1).

The 25 companies that comprise the Hispanic Business 500's retail sector list posted combined 2006 revenues of $1.7 billion, an 11.3 percent decline compared to 2005. The segment ranks seventh out of the eight sectors in revenues and accounts for just 4.4 percent of the revenues on our list.

The retail leader is Sedano's Supermarkets, a Miami-based chain of 32 stores and 11 pharmacies, that faces mounting competition from Florida's dominant general market grocery chains as they open Hispanic-format outlets. Jacksonville-based Winn-Dixie is launching stores under its Hispanic Neighborhood Merchandising program, and Lakeland-based Publix is opening Publix Sabor supermarkets.

But Sedano's President Augustin Herran isn't worried. "That's not anything we consider significant. We have been catering to the Hispanic market for 40 years and we find it easy to attract a big diversity of Hispanics," he says. Sedano's succeeds by stocking a wide variety of Hispanic foods that cater to the communities surrounding each of its outlets. For example, a store in an area with a large population of Colombians sells a range of foods familiar to them.

Sedano's strategy fuels steady growth. The supermarket chain is No. 15 on the Hispanic Business 500 with 2006 sales of $437.1 million, up from $385.9 million in 2005. The chain plans to open at least three additional supermarkets in South Florida within the next two years, and will eventually expand into Tampa and Orlando, Mr. Herran says.

Long Island, New York-based Dial A Mattress Operation Corp., which operates 1-800-Mattress, prospers amid growing competition from a variety of online, telephone, and brick-and-mortar retailers. The company is No. 68 on the Hispanic Business 500 with 2006 revenues at $110 million, up from $83 million in 2005. CEO Napoleon Barragan expects 2007 revenues to exceed the 2006 figure.

To cope with the competition, 1-800-Mattress sells top brands, offers good service, and forges partnerships. For example, some hotels accept requests from guests to buy mattresses they found to be comfortable during their stay, Mr. Barragan says. "We will continue looking for other types of partnerships," he says.

Gracious Home, a New York-based home furnishings retailer with two locations in New York City, also expects higher revenues in 2007. The company's 2006 revenues were $65 million, up from $62.5 million in 2005, to earn a No. 98 rank on our elite list. Gracious Home competes against giant retailers partly by accepting somewhat smaller profit margins, says CEO Natan Wekselbaum. He hopes to eventually open a third location. "But it's hard to compete with the largest companies because they are willing to pay expensive rent prices for the best locations," he says. "We will open the location when we find a reasonable deal."



Source: HISPANIC BUSINESS Magazine and Hispanicbusiness.com, Copyright (c) 2007 All Rights Reserved.


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