The company claims it is close to breaking even in both markets. Naturally, the CEO noted, the plan is to “increase investments in allocating square feet to higher-margin categories”; However, he warned that after 2023, “there will be a gradual decline in brick-and-mortar development”.
The Chilean holding Falabella, linked to the Solari and Del Río families, is betting on further growth of its renovation and finance divisions in Mexico, a country where the company’s CEO, Gaston Bottazzini, revealed that “it has reached a break-even point”.
“Our market expansion has significantly improved operating leverage, with positive results over the past 12 months in Brazil and Mexico, where we are close to break-even in our home improvement and finance businesses,” explained Bottazzini on a conference call with analysts after delivering about the results. . .
This performance during 2022 led the parent company Mallplaza to highlight that “our future investments in these two countries are supported by these positive results in their operations”.
In addition, noted the CEO, Falabella’s plan is “to make more investments in allocating square meters to higher-margin categories.” However, he warned that after 2023, “there will be a gradual decline in brick-and-mortar development”.
Effects of these Markets
Currently, the Chilean holding has operations in seven countries, but Mexico and Brazil have become relevant markets, mainly in the area of renovations, after opening four new stores by 2022.
In Mexico, a Sodimac store was opened in the country’s capital and another in Saltillo, completing 12 stores in operation in 12 months.
Likewise, in Brazil, it opened two new stores in São Paulo and ended 2022 with 55 new stores, making it the third market with the most construction material stores, after Chile (85) and Peru (56).
In this way, the Aztec market has more than 115,000 square meters, while the Verdeamarela market has 197,000 square meters in renovation format.
Notably, Falabella disclosed in its income statement that of the $664 million in investment expected for 2023, $180 million will be used to “continue to develop select growth opportunities,” which means opening 11 new stores. all around the world. region, including Mexico, Brazil, Colombia, Peru and Chile, which seeks to boost the refurbishment sector in the Aztec and Amazonian markets.
It is worth mentioning that during the 12 months of 2022, the Mexican operation recorded revenues of more than US$ 170 million, while Brazil contributed US$ 340 million. Both markets provided double-digit positive change, but the former was undoubtedly the one that contributed the most holding revenue, up more than 46% compared to 2021.