Mexico, where shoppers still flock to Blockbuster and Woolworth

By Ben Bain and Patricia Laya

Old American store brands don't die, they just move to Mexico.

Blockbuster, Woolworth and Sears - extinct or barely hanging on in the United States - are getting an afterlife from Mexican billionaires and other investors who look past the mustiness and see profits.

Ricardo Salinas Pliego's Grupo Elektra SAB paid $31 million in 2014 for 300 Blockbuster stores in Mexico, just as the U.S. business collapsed into a shell of its former self with nothing more than an online streaming service. Woolworth, whose last U.S. shop closed in the 1990s, plans three new locations in Mexico next year. Sears in Mexico, controlled by Carlos Slim's Grupo Sanborns SAB, will open five new stores in 2015; last fiscal year, its U.S. namesake closed 61.

All this shows that there's money to be made from Mexican consumers who still have positive associations with American brands. While Blockbuster as a date-night destination went the way of the VHS tape in the U.S., Mexicans still flock to rent video games the old-fashioned way. Retail brands have a longer shelf life because they don't face as many competitors, and fewer people buy online, said Juan Martinez, the president of research firm Superbrands Mexico.

"There's not the same pressure," Martinez said from Mexico City. "There are many brands that can survive a little longer in Mexico than in the U.S."

Forgive a U.S. visitor for feeling lost in a time warp.

Mexico City's trendy Roma neighborhood is dotted with Blockbuster, Sears, and Woolworth stores, along with art galleries and sidewalk cafes.

U.S. stores and restaurants are "aspirational" brands for many Mexicans, particularly those without easy access to credit, according to Martha Shelton, an equity analyst with Itau BBA in Mexico City.

"They're still very viable in Mexico," Shelton said in a telephone interview. "There's a nice long runway for growth."