Walmart is leaving Argentina, announcing a deal to sell its stores there to a regional grocery chain amid an economic crisis that is gripping the South American country.
Walmart, the world’s largest brick-and-mortar retailer, announced Friday (Nov. 6) it would sell its retail operations in Argentina to Grupo de Narváez, a top South American supermarket chain.
Walmart did not disclose the price of the deal, but it did report to the U.S. Securities and Exchange Commission that it will record a $1 billion, after-tax, non-cash loss in its third quarter report for next year, Reuters reported.
The retail giant, which opened its first store in Argentina in 1995, said it “will continue to support the business through transition services and sourcing agreements,” but that it will not retain an equity stake.
“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,” Judith McKenna, president and CEO of Walmart International, said in a press release.
Walmart’s decision to sell its Argentinian retail operations, where it has over 90 stores and more than 9,000 employees, comes with one of the continent’s largest economies gripped in the throes of a severe economic crisis.
Argentina faces trouble on two fronts. The nation’s economy has been stuck in a deep slump since 2018, long before the coronavirus, which has added to the country’s woes and the decline in its economic fortunes.
Argentina is on track to see its economy shrink by 12 percent this year, while the government recently refinanced $100 billion in foreign currency debt, a large amount given the country’s annual GDP is $450 billion a year, according to the World Bank.
“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,” said Grupo de Narváez CEO Fernando Minaudo in the press release.