The American trademark "PriceSmart" (Chinese translation: PriceSmart) is known to the Chinese and began in 1997.
In January of that year, Beijing native Liu Wuyi opened China’s first Poolsmart membership store on Xueqing Road in Haidian District. The membership store adopted a warehouse membership system and sold many imported goods from the United States, which was very refreshing for Beijingers at the time.
Liu Wuyi's "China Puma" claims to be "a membership shopping warehouse club originating from the United States. The core concept is to provide low-priced high-quality brand products and services, thereby embodying the meaning of the membership concept and forming 'Member loyal purchase' model"
At that time, most Chinese people regarded China Puma as a foreign-owned retailer, but China Puma was a "100% private enterprise" from the beginning to the end, and there was no such thing as a "private enterprise". The holders of every cent of foreign investment have always been Liu Wuyi and his family. Liu Wuyi was able to use the American brand "PriceSmart" because he signed a franchise agreement with Price Ventures, Inc. in the United States in 1996. As early as the mid-1950s, American Sol Price created a new retail model-warehouse membership supermarket and named his supermarket after "Fedmart". In 1976, Sol Price and his son Robert Price jointly founded a company called Price, Co. (PCLB, NASDAQ), and renamed the warehouse membership supermarket affiliated to this company after "Price Club".
After more than ten years of development in the United States, "Price Club" is determined to explore overseas markets due to fierce domestic competition. In 1992, Price, Co. established a joint venture with a Mexican retail company, with each party holding 50 shares. The joint venture launched the first "Price Club" supermarket in Mexico that year. Since then, Central America has become Price, Co.'s key expansion area.
In 1993, in order to seek greater development in the country, Price, Co. reorganized with Costco Wholesale Corp. (COST, NASDAQ), another American retail company, and merged to form PriceCostco, Inc. (PCCW, NASDAQ).
The new company named after "PriceCostco" the supermarket chains owned by the original merged parties, including 101 Costco supermarkets and 94 Price Club supermarkets, becoming the leader of the warehouse membership chain stores in the United States.
In 1994, due to the difficulty in reconciling the business direction and development strategies of the two parties, it was decided to spin off the business of PriceCostco, Inc. The new company Price Enterprises, Inc. (PEI) was separated from PriceCostco, Inc. and specializes in real estate operations. A wholly-owned subsidiary, Price Ventures, Inc. (PVI), was established under PEI. It was this PVI that registered the "PriceSmart" trademark with the US Patent and Trademark Registration Agency in 1994.
PVI’s main mission is to expand warehouse membership-based supermarket chains outside the United States. There are two ways to expand: one is franchising, which allows other companies to use the "PriceSmart" trademark to open warehouse membership supermarkets, with the authorized party PVI providing technical support and charging franchise fees; the other is opening overseas stores through sole proprietorship or joint venture "PriceSmart" supermarket.
In May 1995, the first franchised "PriceSmart" supermarket opened in Saipan, on the Pacific island of Micronesia. In the past two years, some companies in Indonesia, China, Malaysia and the Philippines have also signed franchise agreements with PVI to open PriceSmart supermarkets in their countries.
According to US domestic media reports, in 1996, Timetone International Group, Inc. (hereinafter referred to as Timetone) established in the United States by Liu Wuyi signed a franchise agreement with PVI. The agreement stipulates that Tomton and its partners in China can use the "PriceSmart" trademark to open supermarket chains in Beijing, Tianjin and other cities in China.
This is the first time that the American brand "PriceSmart" has been married to a Chinese company. Everything that happened afterward showed that Liu Wuyi, who obtained the PVI franchise authorization, brought the "PriceSmart" brand back to China and made it bloom all over the country; but on the other side of the ocean, PVI mainly used sole proprietorship or joint venture models in Central America and the Caribbean. Regional expansion of PriceSmart supermarkets.
In the United States, there has never been a PriceSmart supermarket. In 1997, PriceCostco, Inc. changed its company name to "Costco Wholesale Corp.", marking the end of the four-year marriage between Price, Co. and Costco Wholesale Corp. In the same year, PriceSmart, Inc (PSMT, NASDAQ) was incorporated, and the assets of PVI, the original wholly-owned subsidiary of PEI, were injected into PriceSmart, Inc.
As a result, "PriceSmart", an American brand founded for three years, acquired a company carrier with the same name, and PriceSmart, Inc. (PSMT, NASDAQ) later became widely known as The "American Puma" known to the Chinese.
The newly established American Puma is fully responsible for the overseas expansion of the "PriceSmart" supermarket chain, and will focus its development on areas where developing countries are concentrated, such as Central America and Asia. Former Puma President Gil Partida even declared: "The company's mission is to provide a large number of goods and services to poor people in developing and emerging countries."
In 1998, Puma entered into a joint venture with a Panamanian company Set up a company and hold 60 shares in it. They plan to open nine warehouse membership supermarkets in Central America and the Caribbean. That year, PriceSmart supermarkets opened in Costa Rica, Dominica, El Salvador, Guatemala, Honduras and other countries. Later, more than a dozen PriceSmart supermarkets were opened in Trinidad and Tobago, the Philippines, Mexico, Guam and Nicaragua.
It is worth noting that more than half of Puma's expansion in the above-mentioned regions is the establishment of wholly-owned companies, and it holds controlling shares in joint ventures. Judging from Puma's 1998 annual report, as of that year, "PriceSmart", which existed as a franchise, only existed in China and Saipan.
2001 and 2002 are undoubtedly the peak years of the development of Puma in the United States. In developing countries such as Central America and the Caribbean where it has settled, it has a large market share in the local retail industry. Similar to China, the appearance of American Puma in these countries and regions has been hailed as an "American retail giant" by local media. Even the President of Nicaragua attended the opening ceremony of the local PriceSmart supermarket.
On January 15, 2002, the United States' "The San Diego Union-Tribune" published a report titled "Pulse Smart Expanding in the Third World." According to the report, during the global economic downturn and the decline of the retail industry, Puma has maintained its low-price, mass-selling business model and retained its 520,000 member customers. Some analysts believe that Puma has the potential to become a retail giant in third world countries with its unique market expansion method.
The above reports also believe that China's economic and political environment is very different from that of the Americas, which will become an obstacle to Puma's development in China. But the American Puma obviously does not agree with this.
Its Asia President said that PriceSmart's business in China is developing very well, and pointed out that sales in the Chinese market in 2002 are expected to reach US$483 million.
Corresponding to this optimism, in August 2002, the annual report released by Puma showed that its profit in the previous fiscal year (August 2001-August 2002) reached 11 million Dollar. This is also the best performance in the history of Puma USA - Puma USA has always been in the red since 2003. Although PriceSmart has achieved good sales performance in China, since Puma China only operates as a license, its sales performance is not included in the financial statements of Puma USA; Puma USA only grants the Chinese franchise rights - providing technical management support and brand.
In fact, apart from charging the Chinese franchise fee of about US$100,000 per PriceSmart supermarket per year, there is no financial exchange between the two parties.
In sync with the expansion of American Puma in Central America, the Caribbean and other places, China Puma is also making progress in China. From 1997 to July 2003, 13 Puma member stores were opened in various places.
Financial Investigation learned that in February 2001, Puma USA and its Chinese licensee, Liu Wuyi’s American company Novont, Inc. (Novont Company) and China Novont Holdings Co., Ltd. The responsible company re-signed a franchise contract. The contract stipulates that Puma USA allows the two companies to use the "PriceSmart" brand name to open stores in China and provide relevant technical support and management training. It also requires "the appearance of the store, including the design, layout planning, and staff of each chain store." The clothing, equipment, brands, etc. are consistent with Puma's self-operated stores in the United States."
The contract also specifically emphasizes that the US side will provide advice on the opening, development and updating of business plans of Chinese member stores, and its senior staff will go to China at least twice a year to guide chain member stores. In addition, if China requests it, the United States is obliged to train its senior managers.
The contract shows that each of Nuoheng's chain stores in China must pay the US side US$116,900 per year. More importantly, the United States has clear requirements for the speed of Nuoheng's store opening in China - Nuoheng promised to open five new Puma member stores in 2001, three new ones in 2002, and four new ones in 2003; if If China fails to meet the agreement, it will pay a fine of US$116,900 to the United States for each less than one store it opens.
However, China Puma, which fell into financial crisis after 2002, was obviously unable to complete the above-mentioned "important task". In 2002 and 2003, China Puma General Association only launched four Puma member stores.
As China Puma's "store closure crisis" unfolded in the second half of 2004, in December of that year, the cooperation between Puma America and Liu Wuyi came to an end. Earlier in October, the United States issued an ultimatum to China, requiring it to pay a total of US$1.4 million in franchise fees and interest within 30 days. But there was no response from China. On December 10, the United States suspended the franchise agreement, and PriceSmart bid farewell to the Chinese market.
While bidding farewell to China, Puma's self-operated stores in other regions have also encountered trouble recently: On February 28 this year, three PriceSmart supermarkets in Mexico closed - here were once the Puma stores in the United States. Ma's first stop overseas; on March 29, the minority shareholders of Puma's joint venture in Guatemala applied to the court for bankruptcy liquidation of the company to liquidate debts and repay arrears.
Today, American Puma has 26 member stores in 13 countries in Central America, the Caribbean and the Philippines. Its sales in fiscal year 2004 were close to US$610 million, a decrease from the previous year. 7.7, with a full-year net loss of US$30 million. -