Chile’s La Polar to Consider Store Openings, CEO Says
(Corrects sixth paragraph of story published yesterday to show that cost includes new store openings in Colombia, in addition to remodeling costs.)
Empresas La Polar SA, a Chilean department store, is considering new store openings in its home country after two years of emphasizing renovations as the company recovered from a bankruptcy filing, Chief Executive Officer Patricio Lecaros said.
“We are seeing opportunities to expand into new regions of Chile and new locations in Santiago,” Lecaros said in a telephone interview today from the capital. “We are beginning to study them.”
Lecaros, 52, was appointed in July 2011, after the company’s board of directors forced out prior management following the disclosure of accounting irregularities. La Polar, which has an in-house credit card unit, had been unilaterally restructuring terms of clients’ past-due loans to cap loss provisions and boost profit, according to filings at the time.
The retailer, whose board of directors is now headed by Chairman Cesar Barros, raised about $280 million through equity offerings last year to refurbish stores and compensate clients for excessive fees and interest charges. The company’s stock price has tumbled 18 percent this year, after losing 21 percent in 2012 and 91 percent in 2011.
Today the shares fell 2.6 percent to 167.5 pesos as of 3:54 p.m. in Santiago. Chile’s benchmark Ipsa index advanced 0.3 percent.
La Polar has closed seven money-losing stores since 2011 and plans to spend about $25 million this year to remodel three stores in Chile and open two in Colombia, Lecaros said. It currently has 40 stores in Chile and five in Colombia, according to a presentation on its website.
Colombia accounted for 8.4 percent of revenue in the first quarter, according to data compiled by Bloomberg.
The company is on track in 2013 to post its first year of positive earnings before interest, tax, depreciation and amortization, or Ebitda, since 2010, Lecaros said. In 2012, La Polar had negative Ebitda of 35.9 billion pesos. The prior year, the company didn’t report Ebitda.
La Polar plans to add 200,000 new credit card accounts this year, which should increase the total to 1 million, according to Lecaros.
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