World’s largest retailer Walmart Inc is going to sell its retail business in Argentina to Grupo de Narvaez. Grupo de Narvaez is a Latin American company that has retail operations in Argentina, Ecuador, and Uruguay which brings strong local expertise that will position the business to thrive. The retail giant took this decision as Argentina, mired in recession since 2018, has just emerged from a sovereign default, and is grappling with a currency crisis.
Walmart Argentina is the ninth largest private employer in the country, with more than 9,000 employees in 92 stores, distributed in 21 provinces in the national territory and the City. However even after the deal, Walmart will continue to support the business through transition services and sourcing agreements under the new ownership, however, it will not retain an equity stake.
Judith McKenna, President and Chief Executive Officer of Walmart International, said, “We are very proud of our Argentina business and associates as they’ve led and shown resilience throughout this year serving customers when they needed them most. 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.”
Fernando Minaudo, Chief Executive Officer, Grupo de Narváez said “We are very proud and excited about this new investment. The company’s performance and dedication of its incredible associates through the COVID-19 pandemic have demonstrated the fundamental strength and resilience of the business, and we are thrilled to support the team, drive long-term growth and create new opportunities for associates and suppliers across Argentina.”
Argentina is having a tough time as many international firms are aiming to exit from the country’s market due to recession. However, the government has been fending off talk that international firms are looking for the exit.
“In Argentina you see a phenomenon of firms divesting, and companies changing hands, reflecting a lack of confidence in the direction of the country,” said Guido Lorenzo, an economist at consultancy LCG, adding “Argentina lacks clear rules of the game.”