La Polar's exit from the domestic market is a testament to the negative time for Chilean retailers. Only Falabella, with its Homecenter stores and retail chain, closed 2013 with higher profits; quite the opposite to the situation of Cencosud and Ripley, which still operate only at local level.
From his monitoring of the said brands, Leopoldo Vargas Brand, manager of Mall & Retail, concludes that, for now, only Falabella has been able to consolidate its project: a brand with a good reputation and with stores in the right locations to attract its target customers. It also had the advantage of having acquired the local chain Casa Estrella.
Falabella's formats performed well in 2013. Homecenter reported a profit up to September of 37.1 million dollars, and its chain store reached a net profit of 87.1 million dollars by the end of December.
"La Polar did not achieve the expected results, which is due to many reasons, but especially to the lack of good store locations in Bogota and Medellin," assures Vargas. "This, in addition to the problems they faced in Chile, prevented them from achieving profitability."
Financial results varied greatly between different firms. Ripley Colombia, for example, had a negative balance up to September last year. Its income totalled 16.5 million dollars, but its operational results dropped by 17.8 million and it had net losses amounting to 14.9 million.
According to Vargas, Ripley's EBITDA will be positive again in 2015, even though business has not been profitable so far due to similar situations to those suffered by La Polar, whose exit from Colombia was already announced in Chile by its managing board after reporting 19.5 million dollars in losses by the end of last year's third quarter.
Cencosud, with its brand Jumbo and Metro, has yet to publish last year's financial report, although the results of a survey conducted by Reuters indicate that business may have dropped by around 3.9% due to the greater financial expenditure (in advertising and marketing after Carrefour's purchase), in spite of the higher sales volume.
Source: Larepublica.co