Walmart Inc. has agreed to sell its retail operations in Argentina to South American retail group Grupo de Narváez.
Tough trading conditions for international businesses
Walmart entered Argentina in 1995 and ran a multiformat operation, with 92 stores across 21 provinces. In recent times, Argentina has been battling with a currency crisis. A hyperinflationary economy and high levels of unemployment have led to a steep drop in consumption in recent years. This has created tough trading conditions, particularly for international businesses.
The Argentinian government has denied that many international firms are trying to exit the market, however this has been a growing trend in 2020. Walmart had been looking for a group or competitor to take over its business in Argentina for several months, which was stalled by the conditions of the pandemic.
Grupo de Narváez brings local expertise
Family-owned business Grupo de Narváez operates several retail businesses (supermarkets, clothing, pharmacies, and home appliance stores) across nine markets, including Argentina, Ecuador, and Uruguay. It brings strong local expertise, which will help it drive growth.
“We are excited by the local retail expertise the new owners bring to this already strong business, and we believe this deal creates the right structure to help it truly flourish for many years.” Judith McKenna, President and CEO of Walmart International.
Walmart is selling 100% of its operations and will not retain any equity in the business. Its Supercenter hypermarkets will be rebranded after the transition period, but its other banners (including Changomas and Punto Mayorista) will retain their well-established names.
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