Friday , June 24 2022

The weakness in the retail sector prevents Falabella from recovering in the stock market


Market representatives argue that there is uncertainty about strong e-commerce entry.

At the end of July, Falabella's shares traded close to $ 6,000. However, following the announcement of the acquisition of Linio and the capital increase that the company would finance these and other investments, the stock sank and did not recover from there.

Even after the introduction of shares in the capital increase, paper prices did not recover yet on October 19th.

At the end of Friday, this stock, which was $ 5,215.8, had a 1.35% loss on the stock exchange. As of the day before the announcement of the operation, the decline reached 12.05%.

The announcement of an alliance for the acquisition of Linio and the introduction of electronic payments through Google strengthened the company's position against the progress of e-commerce and made good decisions based on local market agents. Then why did the action fail?

From the market, they point to a poor overall performance of the sector. "The retail sector has shown a weak performance in Chile, mainly due to insufficient figures on consumption and employment, which is not clear enough to return significantly in 2019" he adds. This has affected the results of both Falabella and Cencosud. According to Rene Le Fort, an MBI-based analyst, the country's economic environment did not support good results in the company. Iyor Consumption didn't go well and it hit the whole sector, “he says, adding that the entire sector is affected by” Amazon's immediate danger “.

Operators say the point still raises some doubts. While Falabella is actively preparing for the introduction of international e-commerce players, questions remain about how the dynamics of retail will change with the arrival of Amazon and what this will mean for the company's results. For Muñoz, in addition to quarterly reports below expectations, Falabella's horizon has a few sources of risk. In addition to the uncertainty about e-commerce,; there are short-term risks in the integration of Linio and then the arrival of Ikea E.


Last week, the subscription period of the preferred option of the company's capital increase has expired, which ended with the receipt of 12.3 million shares by the controllers.

Considering that 62.1 million paper was put on the stock exchange and 84.3 million shares were approved, the rest was added to 9.9 million. Even though it is thought that this amount may put pressure on the prices when they are sold on the market, it may mean an increase in the supply of Falabella shares when they go on sale, the operators will not have a greater impact.

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