Retailer Aims To Cash In On Latin America’s Growth
With its network of department stores, home-improvement centers, supermarkets and consumer banks, Falabella is one of the leading diversified retailers in Latin America. It is teaming up with smaller rival Ripley’s to develop shopping malls in Chile. Falabella also has retail operations in Argentina, Colombia and Peru.
One of the largest companies in Chile, Falabella is involved in a number of related businesses. Founded in Santiago in 1889 by Italian immigrant Salvatore Falabella, who opened the first large tailor in the country, Falabella manufactures textiles and clothing and offers travel agency services. It also sells insurance and engages in real estate development.
In 1993 the retailer opened its first department store outside of Chile, in Mendoza, Argentina. In the next three years it plans to invest $2 billion to expand its Peruvian and Colombian operations. Falabella has more than 2,000 small suppliers based in Peru alone.
Falabella bought the Chilean operations of US-based Home Depot in 2001 and acquired the Sodimac home furnishings and construction chain in 2003. Falabella failed, however, in its $4 billion bid in 2008 to take over Distribución y Servicio (D&S;), Chile’s biggest supermarket chain operator. The antitrust authority, known as TDLC, blocked the proposed stock-swap transaction, saying it would reduce competition in the market and increase prices. Wal-Mart Stores, the world’s largest retailer, purchased a majority stake in D&S; in January 2009 for about $2.8 billion.
Falabella went public in 1996, and its shares are listed on the Santiago Stock Exchange.