Falabella SA, the region’s largest department store chain by market value, has announced it will close four of its stores in Argentina.
The Chilean company said Monday it would close two from its eponymous retail brand, as well as two more from its DIY and home improvement subsidiary Sodimac. The four shuttered stores are all located in Buenos Aires. The company has ten stores nationwide.
With the news, Falabella becomes the latest in a string of companies who have said they are considering departing Argentina, as the coronavirus pandemic further deepens the challenging business environment in the country, which has been in recession since 2018. The Chilean company said that “changes in consumer habits” were also behind the decision.
The company, which has the largest number of employees for its sector in the region, also said in a statement that it is "evaluating profitability options in its subsidiaries in Argentina, which could include the entry of a strategic partner."
"The pandemic accelerated the process of the digitisation of retail [sales] and has affected results," said the group.
"To adapt to this new trend and make the operation sustainable in the future, Falabella and Sodimac have determined to close four of their stores in Buenos Aires in the coming months," the statement said.
As part of the move, Falabella will offer voluntary redundancy packages to staff, as well as roles in other parts of the company.
Local press reports suggested that the wide gap between the country's official and unofficial exchange rate and restrictions on imports were key factors in Falabella's decision. The company did not mention those reasons in its statement, however.
A spokesperson for the Productive Development Ministry did not respond to a request for comment.