Falabella achieved a leap forward in the first quarter, driven by online business

Falabella is a multinational department store chain owned by the Chilean multinational SACI and is the largest department store chain in South America.

The company reported a profit of $137.3 million in the first quarter of 2021, exceeding the figure for the same period in 2020 by 713.8%, with online business being the main driver of its big leap. Experts believe this trend will continue in the coming months, but warn that the company will face increasing competition.

The multinational Falabella seems to be on the right track in 2021 , reporting that revenues for the first quarter increased by 10.7% compared to the same period last year , reaching $2,479.2 million. Its profits soared by 713.8% (from $23.2 million in the first quarter of 2020 to $137.3 million in this period).

The company's high earnings were mainly driven by its e-commerce platform, with GMV (gross merchandise volume : the total value of products or services sold on the internet platform) reaching $805 million in the first quarter , up 142% year-over-year.

Chile was Falabella’s best performing market this quarter , with strong growth of 28% in retail sales , led by the home improvement division , which grew by 376.9% and contributed US$728.4 million, and online sales, which achieved US$156 million (up 201% year-on-year).

Falabella 's consolidated revenues in Peru and Colombia fell by 3.5% and 7.3% respectively , but they remain growth markets for the company . In both countries, the home improvement category was the best performing segment, growing by 10.2% in Peru (US$180.2 million) and 20% in Colombia (US$251.7 million).

Paulina Vargas, senior analyst at BICE Inversiones, said: “The trend seen in the first quarter of 2021 continues that seen at the end of last year, with the 10% withdrawal of funds from (Chilean) pension funds strongly boosting discretionary consumption and the payment of debts, so all of Falabella’s retail divisions, as well as Banco de Chile, performed well.

On the other hand, in Brazil and Argentina, Falabella's performance was not good. Its revenue in the first quarter fell by 1.1% and 25.5%, respectively, compared with the same period in 2020. The company 's home improvement business fell by 1.1% to $48.6 million in Brazil and by 12.6% to $20 million in Argentina.

In Argentina , Falabella also saw a 21.5% drop in revenues. At the end of March 2021, the company closed three department stores in Argentina and announced in April the closure of its remaining three stores in the country.

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