There is no doubt that we had a very challenging 2023 with strong headwinds. We tackled these challenges head-on and drove changes that underscore our commitment to getting the job done right and successfully overcoming challenges. A history of more than 134 years of being close to our customers, responding to and anticipating their preferences, is Falabella’s stamp. The latter, and our committed team of collaborators are our greatest assets, which have always enabled us to respond to challenges.
This year’s weak results were partly due to a negative environment
in our three main markets, where economic crises and political
challenges synchronized. However, despite the context, we know
that the right answers and solutions depend on us.
Winning over our customers, day after day, is our primary goal.
To achieve this, it is essential to keep them at the center of
everything we do - this is our raison d’être. This must be the focus
of all our strategies, along with the constant strengthening of our
competitive advantages to achieve it. This is the philosophy that
has driven the management of Falabella this year and throughout
its history. Our mandate has been to focus our energies on
continuing to surprise our customers.
Our Department Stores, Home Improvement Stores and
Supermarkets continued to reinvent themselves, adapting their
alue proposition to respond to and to anticipate customer needs
in a rapidly changing and increasingly competitive environment.
Our shopping centers continued to transform themselves into
new urban centers with great success. Finally, our financial
business has made remarkable progress through digitalization
of its services and products, with a particular focus on people,
and is in a leading position in 2023.
Our challenge to become a digital company is more relevant
than ever, and we continue to strengthen our ecosystem.
During the year, we refocused our digital strategy to address
the specific customer needs of all our businesses, building upon
our core competitive strengths. Interaction with our customers
through digital technologies, broad and selective product offerings
through our specialty formats and of our Marketplace, together
with related logistics services, remain essential components
that will enable us to continue to engage customers and build
a profitable business.
Our ambition is to offer an ‘integrated value proposition with
a clear curation in everything we offer! Our platform is where
consumers should find the best products, the best solution and
the best services.
Today, our digital platform has a common technology for all
formats that is scalable and a friendly tool for suppliers or
sellers. We have a unified shopping cart, backoffice, payment
processor and fraud management. Today, we are also building
robust logistics: our Click & Collect is also unified; and we deliver
about 60% of our products in less than 48 hours. In all of these
areas, however, we still have opportunities to be relevant to our
customers and provide them with a better and better service.
Omni-channel is one of the great differentiators and strengths
of Falabella, because it allows us to serve our customers in their
preferred way: shopping in a store, from the comfort of their
home, or any combination of the two, hopefully frictionless. In
our ecosystem, digital and in-store channels complement each
other to create a comprehensive value proposition. For example,
more and more customers are picking up their products in-store
every day, with about 20% taking advantage of in-store shopping.
And a high percentage of today’s ‘consumer journeys’ start in a
digital channel and end in our stores.
As we focus our energies on our core businesses and continue
to strengthen our competitive advantages, we are also moving
forward to respond with equal urgency to the organizational
challenges that managing these businesses poses today.
The world is becoming increasingly complex, and our ecosystem
is no stranger to this situation. With greater complexity, our
response must necessarily be greater simplicity in order to
continue to be effective as an organization.
Operating more simply requires us to focus
our energies on our core businesses, as well
as on the way our team is structured and how
our people interact. Therefore, this year we
made progress in streamlining the decision
processes, fostering collaboration, and aligning
empowerment with accountability, through
the right incentives. Today, more than ever,
our future success depends on our ability to
work as one big team. Simplicity must be our
great companion.
As for the downgrade in investment grade, Falabella is taking
the necessary steps to regain it as soon as possible. We have
a solid solvency position that allows us to face our financial
commitments with peace of mind. In addition, we have no significant debt maturities next year and maintain a comfortable
cash position.
At Falabella, we know that we are protagonists of our future, not
victims of circumstances. We cannot control the wind, but we can
control the sails and the helm. Forecasts for 2024 predict fewer headwinds,
but no tailwinds. There are many adjustments we
must continue to make to keep our ship nimble and responsive
to our customers and shareholders.
We have a winning model. We know the opportunities are there.
We have all the elements to seize them; most importantly, the
thousands of employees who work tirelessly to get the job done.
I thank them all; we know this has been a difficult year.
Lastly, thank you to our shareholders for maintaining your
confidence in our ability to restore profitability to our investments,
which requires being increasingly rigorous regarding where it is
convenient for us to invest.
With conviction, collaboration and agility, I am very optimistic in
that we will not only get through the bad times, but we will also
come out very strengthened.
Enrique Ostalé
Chairman