To the average American, discounter La Curacao isn't exactly in the same league as Target (TGT ) or Wal-Mart (WMT ). But to new immigrants in Southern California, many of them undocumented Hispanics, the six-outlet department store chain offers everything they could want: electronics, kitchen appliances, international phone service -- and a little bit of home.
Walk into La Curacao's flagship store, near downtown Los Angeles, and you've entered a tiny corner of Latin America. Boom boxes, toasters, microwaves, and coffee makers are piled high on shelves.
The Spanish-speaking staff stands ready to assist. Shoppers can sign up for Pasito.com, La Curacao's own Internet access service, and Curatel, the company's long-distance carrier.
Comcast (CMCSA ) advertises its CableLatino product, its Spanish-language cable package, on big banners. The smell of rotisserie chicken wafts through the aisles from a nearby Pollo Campero, a fast-food chain whose franchise rights are owned by La Curacao's founders.
But it's not just the variety of products, Spanish signage, and multilingual staff that makes La Curacao appealing to immigrants. It's the chain's willingness to hand out credit -- and trust -- to those who are often in the country illegally, possess little credit history, and frequently work poorly paying jobs. "There's a perception of risk among this population," says Hector Perez, La Curacao's senior vice-president of finance. "But the only difference is a border and a piece of paper."
Founded in 1980 by Jerry and Ron Azarkman, two brothers from Israel who once sold electronics on the streets of Los Angeles, La Curacao is now a mainstay of Southern California's booming new immigrant community. The privately held company doesn't disclose sales, but executives confirm its headquarters store posted sales of more than $75 million in 2003.
With nearly a quarter of the nation's 11 million undocumented immigrants living in California, La Curacao has found a lucrative niche, though not necessarily an easy one. "It's a very unique market," says co-founder Ron Azarkman. "Tough to expose, tough to define." Indeed, drawing immigrants wary of big companies -- and government officials -- out of the underground economy has been the cornerstone of its success.
La Curacao staffers personally interview applicants for its store credit cards, often accepting alternative identification such as the matricula consular, a form of ID issued by Mexican, Guatemalan, and Argentinian consulates in the U.S. that is highly popular among undocumented immigrants. Some 75% of applicants for the Mexican matricula who have been in the country less than five years lack a U.S. ID, according to a survey by the Pew Hispanic Center, a Washington, D.C., research group.
NO DOCUMENTS, NO PROBLEM.
Immigrant borrowers, who operate largely in cash, don't need a credit score to establish creditworthiness. Instead, they can bring pay stubs and utility bills as proof of earning power and their ability to handle bills. Close to 1 million customers use La Curacao credit cards. "Our strategy embraces this [undocumented] segment. General market retailers can't do that," says Perez. "If [the customer says], 'I don't have documents,' I don't care."
That pro-immigrant strategy sometimes takes an interesting turn. When Guatemala Consul General in Los Angeles Fernando Castillo signed up for a credit card at La Curacao's downtown store in 2002, he showed the clerk his real Social Security number and diplomatic driver's license. The clerk, unaccustomed to mainstream documents -- let alone a diplomat's driver's license -- rejected him. But a supervisor soon called to offer Castillo a card.
A month later, he received another call in his consulate office: it was La Curacao's customer service department reminding him to pay his bill -- the day before it was due. "They don't care if you're the President of the U.S.," he says approvingly.
The chain's biggest competitors, such as Best Buy (BBY ) and Sears (SHLD ) have yet to reach out to new immigrants in the same way. La Curacao rarely asks immigrant clients to sign contracts, instead sealing the deal with a handshake, say Perez. And because its immigrant customers carry unusual risks -- such as the threat of deportation -- they have to pay slightly higher interest rates -- about 23% -- than most retailers charge.
But almost all customers qualify for no-interest financing for as long as 18 months, a perk undocumented immigrants would rarely secure at big retailers. The result: Executives say they have seen customers come back to pay bills after being deported for two years. La Curacao has learned that serving this often disenfranchised population pays off -- literally.
By Brian Grow in Atlanta
Edited by Patricia O'Connell