Chile's Falabella – Succeeding through an Integrated Retail Strategy

Case Code: BSTR496 Case Length: 20 Pages Period: 1889-2016 Pub Date: 2016 Teaching Note: Available

Price: Rs.600 Organization: S.A.C.I. Falabella Industry: Retail Countries: Chile, Latin America Themes: International Business, Brand Management

Abstract Case Intro 1 Case Intro 2 Excerpts

Falabella's Early Days

In 1889, Salvatore Falabella (Salvatore) a tailor from Genoa in Italy opened a large tailor shop in Santiago, Chile. Gradually, Salvatore built the shop up into a clothes store that catered to the needs of the entire family. In the 1930s, Alberto Solari (Solari), who was married to one of Salvatore's granddaughters, joined the business. Solari played a major role in expanding the business into new product categories, apart from adding new points of sale. He also brought several members of his family into the business to assist him.

In 1937, the business was incorporated as S.A.C.I. Falabella (Falabella). In 1958, Falabella became a department store, offering a wide range of home-related products. In the 1960s, the company opened several new outlets in Chile, becoming the first retail outlet to expand operations nationally.

Over the years, Falabella diversified into other businesses. In 1980, the company launched its own credit card called CMR Falabella that was offered to customers for use at its stores. In 1990, the company acquired a stake in the Mall Plaza group, which enabled it to develop its first shopping mall called 'Mall Plaza Vespucio'. The mall catered to the Santiago middle class. This was also the first mall in Chile and had various facilities that included a food court, the country's first multiplex cinema, and a children’s play area. The acquisition also marked Falabella's entry into the real estate business. Over the years, it opened several malls or power/shopping centers in various Chilean cities. In these malls, Falabella stores served as the 'anchor' tenants...

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