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The Falabella group plans to finish the operation of its 10 stores in Argentina, as a result of the economic crisis of Covid-19 and the problems represented by the “exchange rate gap”, reported the trans-Andean newspaper Clarion.
According to the medium, the company “is looking for a strategic partner that will allow it to lower its exposure in the country (…) in a year in which the GDP will fall at least 12%, the drop in consumption reduces the outlook for the multi-store chain “.
“In the country, Falabella has 10 stores and the same business group owns 9 Sodimac branches, with stores specializing in construction materials and household items,” adds the newspaper.
The sources of Clarion indicate that, in addition to the pandemic, there are “the usual problems of the Argentine economy, among them, the increasingly marked restrictions to import and the impact of the exchange rate gap “, which is why a” strategic partner “is being sought.
“The decision is made, but it would not be imminent. There are directors who suggest freezing the entire operation to a minimum and see what happens after next year’s elections, but they are a minority, “they comment from Falabella.
In addition, Falabella has around 300 thousand clients in Argentina with its CMR credit card.
The group, which operates in Chile, Argentina, Peru, Colombia, Mexico, Brazil and Uruguay, lost between January and June 136 million dollars, compared to the 205 million profit it achieved in the same period of 2019.
Falabella Officer: Seeks a partner, store closings and voluntary withdrawals
Through a statement, Falabella confirmed that “it is evaluating profitability options for the operations of its subsidiaries in Argentina., which could include the entry of a strategic partner for them “.
“The pandemic accelerated the retail digitization process and has affected its results in that country. To adapt to this new trend and make the operation in Argentina sustainable over time, the company has determined to close four of its stores in Buenos Aires in the coming months: two Sodimac home improvement stores and two Falabella Retail stores, “he added.
Also, “to accompany this process the implementation of a voluntary withdrawal has been resolved. This plan also includes workers from headquarters. Those employees of the stores that will be closed will have the alternative of being relocated to another branch store. “
