Grupo Salinas
The origins of Grupo Salinas are set in 1906, when Mr. Salinas’ great grandfather, Benjamín Salinas, created Salinas & Rocha, a modest family-owned furniture manufacturing company. In 1950, Mr. Salinas’ grandfather, Hugo Salinas Rocha, created Grupo Elektra, and when Ricardo Salinas became CEO of the company in 1987, Elektra had fewer than 60 stores and averted financial distress following the devaluation of the peso. Mr. Salinas refocused Elektra on basic products: appliances, electronics, and furniture. Significantly, he developed a vast new consumer market among Mexico’s lower-middle income consumers by providing credit sales (guided by careful risk-management practices) and diverse financial products and services, including money transfers via an alliance with Western Union. In just a few years, through organic expansion and acquisitions, Mr. Salinas built Grupo Elektra into Latin America’s largest specialty retailer.
Grupo Elektra expanded further and became Mexico’s biggest consumer-finance company when, in 2002, it won the first banking license granted to any Mexican institution in nearly a decade. The strategy was to build new markets by creating new buying power among classes of people largely ignored by most other major Mexican businesses. In 2003, Grupo Elektra was granted a license to operate a pension-management business branded as Afore Azteca which set new low commission standards, and increasing the range of services for clients overlooked by financial services firms in Mexico. Similarly, Grupo Elektra launched Seguros Azteca, an insurance company designed to bring basic insurance products to the vastly underinsured mass market.
Mr. Salinas is also chairman of TV Azteca, the second largest producers of Spanish-language television programming in the world. It is one of only two nationwide broadcasters in Mexico.
TV Azteca was founded in 1993 when an investor group led by Mr. Salinas bought from the Mexican government two national television licenses coupled with television studios full of decrepit broadcasting equipment. Under his leadership, TV Azteca has broken Mexico’s long-standing television monopoly through the successful privatization of the Azteca 13 and Azteca 7 networks. Thereafter, a duopoly has been established: TV Azteca and Televisa remain the only nationwide TV broadcasters in Mexico, a country of 107 million.
Most recently, Mr. Salinas created the Empresario Azteca program and its parallel, Empresario Azteca Association (ASMAZ), as a broad program to support small businesses the core of Mexico’s economy. This initiative applies the breadth and depth of Grupo Salinas’ management expertise, financing capabilities, market strength, purchasing power, and its extensive distribution network to provide training, consulting, financing, equipment procurement, and other resources to small businesses throughout the country.
Mr. Salinas also formed the nonprofit Fundación Azteca in 1997 to address a broad range of social problems with ongoing campaigns in healthcare and nutrition, education, and the protection of the environment. It is a foundation that finances and supports other foundations, thus leveraging its impact exponentially. Fundación Azteca has raised millions of dollars, benefiting hundreds of thousands of lives. In 2005, Mr. Salinas launched Fundación Azteca America, which is committed to improving the well-being of the Hispanic community in the United States by functioning as a nationwide bridge between donors and Hispanic foundations.
In 2001, TV Azteca launched Azteca America, a wholly owned Spanish-language broadcasting network aimed at the 40 million-strong Hispanic population of the United States. Azteca America has affiliates in 62 markets, including Los Angeles, New York, Chicago, Miami, and Houston, reaching 90 percent of the Hispanic population in the U.S.
In July 2003, Movil@ccess, also a Grupo Salinas telecommunications operator, completed a successful tender offer to purchase 75% of Grupo Iusacell, which was facing bankruptcy. Since then, Iusacell’s financial performance, quality of service, and technology platforms have improved noticeably.
On November 18, 2008 it was announced that the Mexican Ricardo Salinas Pliego, current owner of the Mexican broadcaster TV Azteca, purchased 28 percent of the bankrupted American retailer Circuit City.
Ultimately Salinas Pliego lost $41 million on his 28 percent Circuit City stake after his attempts to restructure debt with store suppliers failed and he consequently abandoned plans to buy the company.
Read more about this topic: Ricardo Salinas Pliego