Grupo Elektra is a Mexican financial and retail corporation services company, serving the Latin America market by providing consumer credit. Grupo Elektra is divided in two divisions: retail and financial.
Elektra, the main chain of the group has over 600 stores in Mexico and Latin America focusing on electronics, white goods, home appliances and furniture. Founded in 1950 by Hugo Salinas Rocha, the grandfather of the chairman, Ricardo Salinas Pliego, this company has been a family run business since it started. Elektra was the first manufacturer of television in Mexico selling TV sets through door-to-door vendors.
In 1954, Elektra opened its first credit program extending credit to ...view middle of the document...
Electra also introduced other programs, domestic wire transfers, extended warranty programs, photoproducts, processing services, and saving accounts. Electra also created Bodega de Ramates, a retail refurbishing, repossessed goods and discontinued models that they used to target low-income customers that had income of $200 or less per month.
Elektra opened its first stores abroad in Guatemala in 1997, and 43 other stores in El Salvador, Dominican Republic and Honduras. The following year 20 more stores opened in the Peruvian Market. Prices were kept 20% below La Curacao, an aggressive competitor who had more than 400 stores in the region.
The company continued to grow and in 1999 Elektra took over Salinas y Rocha stores, a furniture and home appliance retail chain, founded by Ricardo’s great grandfather and one of his cousins. The store had a strong national recognition and targeted the higher income families making $3,000 to $7,000 per month income.
By 2001 Elektra had an impression board of director including Alvaro Rodriguez, a former banker in Latin America, Europe and the United States. Rodriguez held a bachelor’s degree from the Instituto Technologic Autonome de Mexico and a MBA from Harvard Business School and joined the company in 1997.
Joining the team in 1999 as Vice President of Marketing, Mario Gonzalez spent 23 years in marketing, marketing research, sales and operation working for companies including Nabisco, Gillette, PepsiCo and Casa Cuervo. Gonzalez holds a degree in Business Administration and Marketing specialization.
Filiberto Jimenez joined Elektra in 1996, and became General Director of Store Operation in 2000. Jimenez holds a degree in Marketing and a MBA with a major in International Business. Jimenez also served as Director of Operations of Elektra and the CEO of the Salinas & Rocha, another chain of Elektra.
Completing the main directors and officers of Elektra is Mario Gordillo who joined the team in 1993 occupying several positions within the company departments of purchasing, financial services, and distribution. Gordillo has an undergraduate degree in Industrial Engineering and Systems and two Master’s degrees, one in Finance. In 2001, Gordillo joined the officers as head of Financial Services.
As the company continue to grow so did the need for customers to purchase on credit. In October of 2001, Elektra charged an interest rate of 42.45% per year. There was not a ceiling in Mexico on the interest rate charged by merchants. Not only was the interest rates high, but the risks of loaning money to the consumers was not as convenient as it is here in the United States. Elektra was not able to go onto the computer and run credit checks or call the local bank and get references. The majority of the customers that Elektra dealt with had the income of $200 a month up to $3,000 and most did not have credit cards, telephones, automobiles or even television sets. In order for Elektra to extend...