How D1 managed to beat Éxito after 15 years. What are the new Salvadoran owners going to do?

How D1 managed to beat Éxito after 15 years. What are the new Salvadoran owners going to do?
How D1 managed to beat Éxito after 15 years. What are the new Salvadoran owners going to do?

Nine years ago, the Santo Domingo Group became the owner of D1, a chain of stores founded by the Chilean Michel Olmi in 2009 of which they had already had a small percentage since 2011. Then the pioneering company in what is known as stores Discounts already had great recognition for its model of own brands and low prices, but they still did not have a dimension that would lead them to even think about stepping on the heels of a retail giant like Éxito, which was controlled there by the Group. France Casino.

See also: The day that Santo Domingo kept the D1 stores

Everything changed when the property passed into the hands of Alejandro Santo Domingo and his family who quickly partnered with two powerful investment funds Ihag from Switzerland and CPP from Canada that injected significant capital to grow. Santo Domingo, who manages the businesses through Valorem, remained with 60% and the foreigners with 40%, with which they did not lose control and achieved the muscle they required to finance exponential growth: today they have 2,500 stores in the country after a investment in 2023 greater than $500 billion.

In terms of sales points, D1 surpassed those of Ara, Oxxo and Ísimo – owned by the Chars – combined. However, the Portuguese Ara had a good performance, it was number 12 with revenues of $12.3 billion and is planning to expand in the country with the loan it obtained from Scotiabank Colpatria for $170 billion.

D1, who hired the Spanish Christian Bäbler Font in October 2021, a heavyweight in the retail business, and outlined a ten-year strategy that bore fruit in two years with the results delivered by the Superintendency of Companies for the year 2023. This put D1 as the seventh largest company in the country with $17.4 billion in revenue and Éxito in eighth place with $15.7 billion.

The unstable circumstances of Éxito, the leading surface trading company due to the decision in mid-August by its owners, the French Cassino, to sell the emblematic chain, contributed to D1’s advantage. Only at the end of the year did the horizon clear when it was defined that this would remain in the hands of the Calleja family of El Salvador for which they paid USD 550 million.

The Callejas without an alternative other than reacting quickly against D1

The new owners, who took over as directors only a couple of months ago, have so far not made their strategy public. At the moment it has only been reactive. They began by changing the role of president of the group to Carlos Mario Giraldo, who had kept the brand in first place, leaving him only responsible for the warehouses. Added to this decision is the directive to reduce the number of employees who have already returned effective with layoffs or retirement plans.

Thousands of suppliers are waiting with concern for the changes that are announced to come. Los Callejas, like D1, will strictly manage inventories, betting on rotation, so it is known that what does not sell quickly will be taken out of the offer. So far no new products have arrived nor are any innovations seen.

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