In 1889, the Italian immigrant Salvatore Falabella started a tailor shop in Santiago, Chile. It wasn’t until the 1930s, when he was joined by Alberto Solari, the husband of one of his granddaughters, that the business expanded into women’s clothing and housewares.
Today, with a network of department stores, supermarkets and home-improvement shops that span the Andean region, publicly traded SACI Falabella is Chile’s largest company by market value, generating $11.5 billion in annual sales.
The Solari family still controls about 63 percent of the retailer through a web of holding companies, documents filed with Chile’s securities regulator show. Together, they command a combined net worth of at least $16.5 billion, according to the Bloomberg Billionaires Index. Seven of those heirs individually hold 10-figure fortunes, and none has ever appeared on a major international wealth ranking.
“They’re a very low-profile family, very simple,” said Enrique Briceno, a spokesman for Falabella in Santiago, who declined to comment on the family’s net worth. “They have no interest in this sort of thing.”
Propelled by growing consumer demand, Falabella’s stock has increased more than 17-fold since the company’s initial public offering in 1996. Retail sales in Chile, the source of about two-thirds of the operation’s revenue, climbed at an average annual pace of 8.2 percent from 2007 through 2011.
That growth has also lifted the fortune of Horst Paulmann, the billionaire founder of retailer Cencosud SA, a Falabella competitor. Paulmann’s net worth is valued at $5.5 billion, according to the Bloomberg ranking. The richest person in Chile is Iris Fontbona, matriarch of the Luksic family, with a fortune of $20.3 billion.
The Falabella family fortune is controlled through more than two dozen entities. Their ownership structure is detailed in annual reports filed on the website of Chile’s securities regulator. Current Chairman Juan Cuneo Solari, a nephew of the late Alberto Solari -- the man who married into the Falabella family and diversified their product offering in the 1930s -- controls 12 percent of the company, including shares held in his two daughters’ names. That gives him a fortune of at least $3.2 billion, according to data compiled by Bloomberg.
Piero, Vice Chairman Carlo, and Chief Executive Officer Sandro Solari Donaggio -- the sons of Alberto’s brother Reinaldo -- share control of about 11 percent of the company, according to the company’s 2011 annual report. Based on historical dividends and market performance, they probably control a combined investment portfolio of at least $125 million, giving each brother a net worth of more than $1 billion, according to the Bloomberg ranking.
Another cousin, Sergio Cardone Solari, owns 2.3 percent of Falabella. That stake is valued at more than $600 million.
Alberto’s three daughters also own chunks of the company, which has a market capitalization of $26.3 billion. Maria Luisa Solari Falabella’s stake of at least 8.8 percent gives her a fortune of $2.3 billion, while Teresa Matilde’s 12.2 percent holding is valued at $3.2 billion. Liliana Maria owns 4 percent of Falabella, valued at $1 billion, while her two children -- Carlos Alberto and Andrea Heller Solari -- together own another 4.5 percent, worth $1.2 billion.
Through holding company Bethia SA, Liliana and her children also own a minority stake in publicly traded water utility Aguas Andinas SA, valued at about $170 million. Their stakes in publicly traded investment vehicles Axxion SA and Axxdos SA, which own shares in Latam Airlines Group SA, are worth a combined $550 million. Bethia additionally controls closely held investments in agriculture, transportation, real estate and wine, according to its website.
The largest shareholders after the Solaris are members of the del Rio Goudie family. They sold their chain of home-improvement stores to Falabella in 2003 for a stake in the company. Today, they control a combined 20 percent of the shares. The $5.3 billion holding is split among seven family members: Jose Luis, Barbara, Juan Pablo, Felipe, Ignacio, Sebastian and Carolina del Rio Goudie.
After Alberto Solari’s forays into women’s clothing and housewares, the family transformed Falabella into a department store in 1958. They opened new locations in Santiago and expanded into other cities over the decade that followed. In 1980, they started the CMR credit card for customers to use in their stores. Falabella first struck out abroad in 1993, opening a store in Argentina, followed by Peru in 1995 and Colombia in 2006.
More than 4.2 million people use Falabella’s CMR card at its 300 stores and shopping malls in the region, according to the company’s website. The operation employs 80,000 workers. Under Cuneo Solari, its billionaire chairman, Falabella plans to invest $3.9 billion in the next four years to open more than 230 new stores and 20 new shopping malls by 2017, according to a company statement earlier this month.
“The Solari family has enormous respect from its peers in the Latin American retail industry,” said Jorge Becerra, senior partner and managing director of Boston Consulting Group in Chile. “They have a long term vision of where they want to go.”