Falabella earns 6.1% less in 2018 despite sales rising by 3.4%

Falabella closes another year with a bittersweet taste. The Chilean department stores giant shrank by 6.1% its earnings in 2018, despite having increased its sales by 3.4%.

The company had a revenue of 8,936 billion Chilean pesos (13.74 billion dollars), compared to 9,236 billion pesos (14.2 billion dollars) of the previous year. On the other hand, profits stood at 478.46 billion Chilean pesos (736 million dollars).

The department store business was affected by the exchange rates in most of the markets where it operates. In fact, excluding the currency effects, the sales of the group were only reduced in its Chilean stores, with a fall of 0.6%.

In contrast, Peru, its second biggest market, increased Falabella’s sales in department stores by 4.2%, while Colombia shot them up by 12.7. Argentina and Brazil were two of the markets that evolved worst. In Argentina, the revenue plummeted by 24.3%, while in Brazil, where it only operates through home-improvement stores, it dropped by 6.2%.

Altogether, Falabella operated 504 stores (including supermarkets) and 43 shopping centres at the end of the fiscal year. Online sales were once again the group’s growth engine, with a rise of 26.4%, to 473,189 million Chilean pesos (728 million dollars).

Falabella increased its online sales by 26%, to 728 million dollars

“We continue working on the development of a digital and physical ecosystem, by improving the cross-sectoral abilities of the different business units. We funded the omnichannel distribution centre in Chile, we started to operate crossed click & collect points, where you can pick up orders made through any method; we strengthened the physical presence with the opening of five stores, we consolidated the integration of CMR Falabella with Banco Falabella in Chile, and have included 100% digital processes,” pointed out the CEO of the company, Gastón Bottazzini.

Omnichannelity has been one of the pillars of Falabella’s strategy over the last fiscal year. In November, the company launched a new omnichannel distribution centre in Santiago, the capital of Chile, which entailed an investment of more than one hundred million dollars and will serve both the stores and the online channel.

In the last quarter, Falabella launched a new department store, located in Santiago, with an area of 6,700 square meters.

The distribution giant is now in the beginning of its investment plan that will be completed in 2022, with which it will spend 4.2 billion dollars, as it advanced in January.

37% of the capital will go to optimization and development of information technology and logistics, including the expansion of Linio; 34%, to the regional consolidation of all the business units and the opening of five shopping centres, and the remaining 29% will be invested in the current network of stores.