Walmart Inc, the world's largest retailer, said it would sell its retail operations in Argentina to South American supermarket chain owner Grupo de Narváez, pulling back as the country grapples with an economic crisis.
The US company did not disclose the size of the deal for the operation, where it has over 90 stores, but said it would record about a $1 billion after-tax, non-cash loss related to the divestiture in its fiscal third quarter next year.
Argentina, mired in economic crisis since 2018, has been a tough market for companies in recent years. It is headed for an economic decline of nearly 12% this year, exacerbated by the coronavirus pandemic, which would be the third straight year of recession.
Currency Crisis
The country is also battling a currency crisis, has imposed tough capital controls, and recently emerged from a sovereign default after restructuring over $100 billion of foreign currency debt with local and international creditors.
The economic malaise and uncertainty have hit corporations in the country and led to others pulling back, including LATAM Airlines Group, which said in June it would halt local operations in Argentina.
Walmart Argentina began operating in 1995 and currently has some 9,000 employees in 92 stores, including the Changomas and Punto Mayorista chains.
With the acquisition, family-owned Grupo de Narváez will own 656 stores, including supermarkets, and apparel and home appliance outlets in nine countries, including Ecuador and Uruguay, and employ more than 24,500 workers.
In 2018, Walmart pulled back from its operation in neighbouring Brazil when it sold an 80% stake to private equity firm Advent International.
