It’s one thing when the French maker of $500 shoes and $2,000 handbags leaves town citing an inability to compete and quite another thing when it’s a discount appliance retailer serving working class consumers with little or no credit.
The retailer, Mexico’s Grupo Elektra, announced plans to leave Argentina with a press release citing “currency controls, import and export restrictions which limit the ability to bring products to market, capital controls which limit investment, high inflation which makes it difficult to make long-range forecasts and labor laws which encourage union activities which impact the investment environment. In addition, there is a culture of not paying debts which makes a credit business unviable.”
Hot on the heels of Elektra’s announcement comes the following headline from Cronista, In Only 2 Years More Than 20 Foreign Companies Have Left Argentina. The article reels off a laundry list of companies leaving Argentina from a wide variety of sectors including logistics (ALL), mining (Vale), call centers (Sykes Enterprises), meatpacking (JBS), fisheries (Sealord), poultry (Tyson Foods), energy (British Gas) and petroleum (Exxon).
Some of the lost dollar amounts are staggering including Vale’s decision to not move forward with a potential US$6 billion potash project in Mendoza. Cronista says at least ten major clothing and luxury brand makers have left Argentina since 2011 including Polo Ralph Lauren, Escada and Louis Vuitton. (Full Story in Spanish)
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