Arizona Border Merchants Still Reeling From Peso's Drop
ARTHUR H. ROTSTEIN
Jun. 18, 1995
NOGALES, Ariz. (AP) _ For years, shoppers from Mexico crowded into the department stores, clothing boutiques and jewelry shops on Morley Avenue just north of the border. Today, the three-block stretch resembles a mortuary.
It has been that way for nearly six months, since Mexico sharply devalued the peso and cut its citizens' buying power in half.
Parking spaces _ once nearly impossible to find _ are plentiful. Handfuls of pedestrians drift past stores glaringly empty at midday.
``For 30 years in the first block of Morley, you couldn't find a location for anything. Now there are four locations that have been empty for the last six months,'' said Ernesto Chavez, a stationery shop owner who expects no relief for a year.
City sales tax revenues in the first four months of 1995 ran 29 percent below the 1994 period, said Hank Tintos, chairman of the City Council's Finance Committee and general manager of the G. Puchi Wholesale Group.
Retail sales in the first three months were down 21 percent from the first quarter of 1994, according to Chamber of Commerce figures. Forty-eight stores in major shopping areas were vacant, compared with 20 a year ago.
``This has got to be, bar none, the most acute devaluation we've had,'' Tintos said.
The troubles in Nogales, a city of about 20,000 people, mirror those in other border towns.
In Laredo, Texas, Convent Street has several empty stores, sales are down as much as 75 percent and landlords have slashed rents up to 60 percent to keep tenants, said Luis Lidsky, president of the Downtown Development Corp.
The peso was worth just under 29 cents before Dec. 20, when Mexico halted its support of its currency. In some places, the peso plunged to 12 cents before rebounding a bit. It recently has fluctuated from 16 to 17 cents.
Burdened by raging inflation since the devaluation, Mexicans cannot afford to go shopping in their own country, let alone across the border.
Chavez used to take in $1,700 in cash sales on a good Sunday. Now? ``I've had Sundays that I sell $4.89,'' he said.
Alex Kory, owner of Alexander's department stores, said his downtown store used to have annual sales of $4 million. ``I'll be lucky to do $1 million'' this year, he said.
His other store is in similar straits, he said. ``One of them is redundant. And right now I have to decide which.''
Mark Capin, chief executive officer of Capin Mercantile Corp., said the company's border business is down 50 percent to 60 percent. It has closed two stores in Nogales and one in Douglas and is shutting another in El Paso.
Its hardware store along Morley had a 5 percent to 10 percent improvement in May. ``But when you're 50 percent down and now you're only 45, there's not too much to be happy about,'' said Jim Capin, another executive in the family-owned company.