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Falabella to Invest $4B in Latin American Expansion

Chile’s biggest retailer is bullish on Latin American expansion.

Falabella Group, which also has outposts in Peru, Colombia, Argentina, Brazil and Uruguay, announced plans Monday to invest more than $4 billion over four years in order to strengthen its presence in the region.

The company said that roughly 44 percent of this financing will fund the opening of 131 stores and 10 shopping centers, but it did not specify where. Additionally, nearly 26 percent will be used to expand and remodel existing locations, while a further 30 percent will be earmarked for logistics and IT.

“These investments will allow us to continue to grow our physical presence, increase the scale and functionality of our digital operations and improve the efficiency and productivity of our business, all of which should contribute to the overall customer experience,” Sandro Solari, chief executive of the Falabella Group, stated. “Our corporate strategy is based on profitable, responsible and sustainable growth. With this in mind, we are closely monitoring the evolution of the markets in which we operate and the opportunities that may arise in the current economic environment.”

Besides its namesake department store, Falabella also operates home improvement stores, supermarkets and real estate and financial services in Latin America. Last year, the company opened 10 home improvement outposts, eight supermarkets, four department stores, two shopping centers and the first Crate & Barrel location in South America. Most of the openings were in Chile, Peru and Colombia.

In addition, the company implemented a Net Promoter Score (NPS) management tool across all three of its retail formats in a bid to measure customer satisfaction and manage service levels at all of its stores and points of sale. Meanwhile, the first phase of a new e-commerce platform was put into operation at Falabella and the group’s Sodimac home improvement chain to help manage strong online sales growth and spikes in demand during promotional events.

Falabella ended 2015 with a total of 459 stores and 40 shopping centers and revenue for the 12 months ended in September was $11.7 billion.