Monday, September 25, 2023

Chile’s Falabella has raised market concerns following store closures

Falabella did not have a good time after the closed some of its stores on Chile and to this is added the resignation of its general manager, Gaston Bottazzini.

Falabella is in the eye of public opinion after the announcement of closing its store in San Bernardo, Chile and the resignation of the general manager, Gastón Bottazzini. Due to these latest events, many are wondering if the Chilean giant is in crisis or if it is part of a commercial strategy.

According to the América Retail portal, the Falabella Group faced severe financial difficulties in the first half of the year with losses amounting to 5,153 million Chilean pesos. Although the banking division showed strength, the company suffered a 9.5% decline in revenue.

Places called Falabella in Latin America

The decrease in income of Falabella also affected the Latin American markets where the Chilean company operates, such as Peru, Argentina, Brazil and Colombia, the latter being the most affected with a drop of 30.9%, but despite this , Mallplaza achieved an increase of 13.3% in their revenue.

The results outlined above led to a reduction in gross profit and a change in net results, thus changing last year’s income to a large loss. In the same line, risk rating agency Fitch Ratings downgraded Falabella Group’s credit rating.

What caused the Falabella episode in Chile?

One of the main reasons why Falabella has these results will include the slowdown of the Chilean economy, high inflation, bank business provisions and logistics problems around the world.

Why did the Falabella store close in San Bernardo?

According to the América Retail web portal, Gabriela Villalobos, host of Pauta de Negocios, indicated that Falabella closed in San Bernardo because “it has a lot to do with the form of purchase, because in these sectors, the level of debt is more high and Falabella has a plan to lower the financial burden.”

Likewise, he added that “face-to-face purchases have also decreased, in 2021, sales per square meter will drop to 1.6 million per square meter per quarter; in 2021, it will rise to 1.7 and this quarter will have low. . drop of 1.22 this quarter,” concluded Villalobos.

Nation World News Desk
Nation World News Desk
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