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Show Page 26 - THE HERALD. Provo, Utah, Thursday, March 17, 1983 U.S. Merchants on Border Crushed by Devaluation BROWNSVILLE, Texas (UPI) -- walk along Elizabeth Street clearly shows the crushing effect Mexico's peso devaluations have had on American border merchants. Once bustling stores are almost empty at midday. Some shops are locked, "For Rent" signs posted in their winA dows. Merchants gather at the coffee shop in the Woolworth store to exchange horror stories about current hard times. Elizabeth Street is the first left turn a visitor can make after crossing the International Bridge from Matamoros, Mexico, into Brownsville. Because of its proximity to Mexico, it is not typical. Other Brownsville shopping centers located farther from the bridge have suffered severe drops in sates, but not to the extent of the Elizabeth Street merchants. Before the three devaluations in 1982, it was common for Mexicans to walk or drive across the bridge and shop for American goods in the nearby stores. Many had charge accounts in the shops. sal sells cigarettes for export into calMexico as well as culators and other electronic products. In an attempt to increase export sales, Garcia has started selling American liquor. He expects the slump to last anywhere from one to three years if Mexico's new administration is able to stabilize the peso, longer if further devaluations occur. Tienda No. 1 is the next store on block and manager Maggie the ago. that present A clothing store named Charles Carranza estimated overlooks the bridge from Eliza- sales are only 10 percent of their levels. beth street and advertises a 154 1981 we sold Christmas to The rate. $1 exchange "During peso manager was away but an em- about $7,000 a day," she said. a"Last ployee said on an average weekday Christmas it was about $700 day. a year ago the store did between And some days it was not even 10 $4,000 and $6,000 in sales, almost all percent." Tienda sells clothing for women in pesos. Now the daily take is $800 to $1,000, the clerk said. The work and children and she said the sales force in Charles has been cut from crew had been trimmed from 15 to three. about 30 to six. The manager of the Woolworth At Universal Bonded Sales Inc., next door said, "We don't give store said his manager Roberto Garcia sales force had been cut from 12 to interviews." Then he gestured to four. He said 95 percent of his his nearly empty store and said, "It customers had been Mexicans but (devaluation) hurts like hell." He he could not give an accurate figure was asked if the 90 percent drop in on the drop in his business. Univer sales reported by his neighbor could It is likely that no group, of merchants anywhere in the United States has felt the impact of the devaluations more than the shopkeepers on and around Elizabeth Street. At the beginning of 1982 the exchange rate was about 25 pesos for $1; now it ranges up to 160 pesos for $1. For the Mexican shopper, American merchandise is six times as expensive as it was 12 months s, be accurate. "Absolutely," he replied. Other merchants gathered at the coffee shop nodded their agreement, among them Bernard Levin, owner of the adjoining Amigo Store. "Business is 92 percent off," Levin said. "You can't live with that. We depended upon the other side of the border to help us with our sales volume, and it isn't there any more." Levin said he was stuck with a large inventory of clothing for men, women and children, and until he sold that supply he would be unable to buy more. He is able to keep his doors open, he said, "because I wasn't caught with a whole lot of bills that had to be paid, and I own my own building. I'm not faced with a lot of rent. "I'll just sweat it out. I lose some more each day. It's getting worse, in fact. Now they (Mexican shoppers) are only buying necessities underwear, hosiery, and seen in his 34 years of doing her business was down by half. business in Brownsville and he has "There is very little sign of cut his sales force from 19 to seven. improvement," she said. "But Across the street at the New eventually it will come back. It's Yorker, a shop selling quality just going to be slower coming back women's clothing, manager Gloria than other times." Fenders Fine Fabrics sells patAlvarado said business is off 80 to terns and women's dance wear as 85 percent. Middle and upper-clas- s Mexican women used to make spe- well as a variety of colorful textile cial trips to her shop and would material. "It's the same here as walk out loaded with packages, she everywhere else," manager Juan said. Now the few who show up buy Babiak said. 'The situation is critical." only one or two items. He said his business was off Her charge customers are slowly paying off their biiis, she said, with "sometimes 70 percent, sometimes 1,000 pesos a common payment. 80 percent." "That's only a little more than $6," The next store was closed, a few she said, holding a stack of bills. dusty toys and children's books in "They used to pay $30 or $40 at a the unwashed window. A few customers were scrutiniztime." In the rear of the New Yorker is ing the women's and children's a fine fur department stocked with clothing up the street at Wise mink coats, jackets and other furs. Fashions. Elvida Valdez, the man"That's what keeps us afloat," ager, said business was off about 85 Mrs. Alvarez said. "Some custom- percent. Although she had kept all ers still come by and buy minks. of her employees on the payroll, The ones that had a lot of money she said, some were now working she said. have still only five to 10 hours a week. they money," At El Corte Ingles, manager Gen-ar- o "Many have their minks in such. We used to be able to sell a Martinez said customers jacket now and then, but not Next door at seemed to be trying to keep their sells which Kory's, Levin said. today," It is the worst slump Levin has lingerie, owner Dodette Kory said purchases under $750 pesos or about ." $5. Oilman Will Keep Trying To Acquire More Property - Even if T. DALLAS (UPI) Boone Pickens Jr. did not have such an unforgettable name, he would be hard to ignore as one of the few oil and gas magnates making daring deals in today's depressed, frightened industry. The man who founded Mesa Pe- troleum Co. in 1956 with a $2,500 investment is now one of the highest-paid executives in the country his 1981 salary as president and chairman of the board was $575,000 and presides over an empire that had 1981 revenues of almost $407 million. It's the Amarillo, Texas, oil man's fervor for takeovers, however, which made him the toast of Wall Street and the scourge of other energy corporations' boardrooms. Last summer he unsuccessfully sought to buy Cities Service of Tulsa, Okla., an industry giant with 20 times the revenues of Mesa, and last fall he made a similar failed attempt at Dallas' General Ameri- can Oil Co. "We were after 'em," Pickens said, but he acknowledged he does not mind the consolation prizes millions of dollars made through the accompanying stock sales, $34 million in the case of GAO. Ask Pickens, a physical fitness fanatic who has a reputation for ruthless racquetball, whether those thwarted takeovers dulled his liking for the tactic, and his eyes twinkle. "There's no reason to believe that our management philosophy has changed. So consequently you've got to think that we're interested in acquisitions," he said recently following an address before the Society of Petroleum Engineers. Everyone wants to know what Pickens will do next, and he enjoys commenting Recently he told a meeting of major stockholders: "We've come up with a new idea. If you would all go in ... and move the price up to $20 a share, we would send you a confidential note each week on takeover tips." There is more to the attempted takeovers than just the thrill of the chase, and last year's two highly publicized efforts were not Pickens' first. In the past he has made unsuccessful bids for the Southland Royalty Co., Aztec Oil and Gas Co., and Imperial American. tongue-in-chee- . Pre- season patio furniture savings Our entire stock of new patio furniture is on sale now at savings. Buy now and take delivery1 when you're ready! Choose from Brown Jordaa Mallia Meadow-cra- ft Homecrest, Lawnlite, Woodard and the Wire Cd Shown is just one of the many styles you'll find on sale end-of-seas- in our Furniture department now through the end of March at SL Downtown, Cottonwood, University Mall and Ogden (716). Shop weekdays 10-- Saturday 10-6. 9, Cbsed Sunday. k. He seeks acquisitions, he said, because it fits his philosophy of keeping Mesa viable by replacing its reserves. "If you're not replacing your reserves then you're liquidating," he said. "As far as we're concerned ... management has one primary reto protect the comsponsibility pany's assets, which are its reserves. (You can do that) through exploration success or acquisition. "The pendulum has swung in favor of acquisition," he said. "We believe the emphasis will be on redeployment of assets, spinoffs, liquidations, etc. "Management is going to have to be very innovative. Some deals may very well fall in the realm of the unheard of," Pickens said. The future of the oil and gas he said, "is industry, short-terbleak. We don't believe our industry will rebound until 1985 or 1986. The key word for the industry very simply will be survival. "There's going to be a lot of scrambling for earnings in 1983," he said. "There are going to be tremendous opportunities and we're looking at them. There'll be a lot of deals made in the next few years. outlook "I believe the long-teris good. Our products will be the for energy in the most cost-efficie- nt years to come." At present, he said, there are four primary pressures on the industry: replace those oil and gas assets; restructure the industry to negate the short "reserve life index" of resources, which is currently under 10 years; circumvent high finding costs; and listen to the stockholder, Our spring drapery & bedcovering sale ends Saturday Dress up windows and beds for the sunny warm weather ahead with savings in our Fashion Window and Bedcoverings departments. Give you and your house an extra life with a tremendous selection from CroscilL Karpel and Bbomcraft In a variety of fashion colors including 20-40 off bedspreads and comforters. Prices start at 49.99 for twin size. 5 off lace, embroidered and voile panels. Prices start at 20-4- 8.99 for 60x84". 0 off priscilla and novelty curtains. Prices start at 34.99 fa 20-3- prisciUas. 13 off custom drapery orders. 13 off Levobr mini-blind- Shop weekdays Cbsed Sunday. 10-- 9, (732) s. Saturday 10-- 6. |
