Grupo Falabella will spend more than $4 billion to bolster its South American presence by opening 131 stores and 10 shopping malls by 2019, the Chilean department-store network said Monday.
The Santiago-based retail conglomerate, facing pressure from a potential tie-up between Mexico’s Liverpool and local archrival Ripley, said it will invest $4.03 billion between 2016 and 2019, up 9.5 percent from the previous four-year period.
Roughly 40 percent will be earmarked to open 131 stores and 10 shopping malls in key South American markets such as Peru, Colombia, Chile and Argentina, though the 459-strong chain would not detail specific locations. It added that another 26 percent of the projected sum will go to enlarge and remodel stores and existing shopping malls, of which it has 40. The remaining 30 percent will be spent to improve infrastructure, logistics and IT, the company said.
“These investments will enable us to improve efficiency and productivity in our different businesses and to strengthen our physical and digital presence…,” said general manager Sandro Solari. “In line with our profitable growth strategy, we will remain alert to the evolution of the different markets and opportunities that could emerge in the current economic context.”
Paying attention to such “evolution” is becoming increasingly pivotal as Mexican department-store giant Liverpool is currently mulling a potential merger with Ripley, a smaller, yet fast-growing Chilean department-store network hungry for South American growth. Other rivals such as Colombia’s Exito are also taking the market by storm. They are quickly threatening Falabella’s reign as South America’s largest department-store operator with around 100 Saga Falabella stores selling to some 13 million people in the Andean region.
Apart from its main department-store subsidiary, Falabella operates growing supermarket and home-improvement formats. Last year, it installed four department stores, eight supermarkets, 10 Sodimac home-improvement stores and the region’s first Crate & Barrel shop. Most openings took place in Chile, Peru and Colombia but also in Brazil and Uruguay.
A Falabella spokeswoman said “all units will continue to grow” but would not disclose how many stores will be opened for each segment in the future.
She said Falabella sells private-label clothing in its main Tottus supermarket banners, notably from its mainstay Cherokee brand.