Fitch Upgrades Chile Retail Giant Falabella

Fitch Ratings has raised Chile retail giant Falabella to BBB from BBB-, one notch higher on its international scale, with a stable outlook. For US and European bond investors, the owner of stores, a bank and shopping malls now sits two steps above junk instead of one.

The decision became public on Wednesday 14 October in Santiago, Chile’s capital. Fitch, one of the three big global credit rating agencies, pointed to lower debt, stronger margins and more cash.

Grupo Falabella is a Chilean group that sells clothes, home goods, building materials and groceries, and lends through its own bank. Its Company Intelligence profile sets out its units, its markets and its listing on the Santiago stock exchange.

On Fitch’s international scale, the rating moved to BBB from BBB-, Diario Financiero, a Chilean business daily, reported on Wednesday evening. La Tercera, a leading Santiago newspaper, reported the same move in its business section Pulso.

On Chile’s national scale, Fitch raised Falabella and Sodimac, its home-improvement chain, to AA(cl) from AA-(cl). The suffix marks a grade that compares Chilean borrowers with each other, not with companies abroad.

Fitch also kept Falabella’s shares at Primera Clase Nivel 1(cl), the top grade on Chile’s scale for listed shares. Both newspapers said the outlook on the international rating is stable, a signal that no further change is expected soon.

According to Diario Financiero, Fitch said the decision reflects a stronger financial and business profile for the group. The agency credited Falabella’s market position and the spread of its businesses.

Better margins let the group build up cash, pay down debt and lower its borrowing relative to earnings, the newspaper reported. That is the core of Fitch’s case for the retail giant Falabella.

Both outlets cite the company’s recent results as the backdrop. Falabella earned a record US$897 million in 2025, excluding a fair-value accounting effect, and US$497 million in the first half of 2026.

That first-half figure was 17.9% higher than a year earlier, according to the company figures reported by both papers. La Tercera added that Falabella called the April to June quarter its best second quarter ever at the operating level.

The upgrade caps a three-year climb for the retail giant Falabella. The group lost its investment-grade rating from Fitch in November 2023, Diario Financiero recalled.

Fitch restored that status on 29 October 2025, lifting the group to BBB- from BB+. S&P Global Ratings, another of the big three agencies, followed in April 2026 with a BBB- grade and a stable outlook.

Fitch now places Falabella one step above S&P’s grade. Its mall arm Mallplaza also gained, after the Chilean rating agency Feller Rate lifted its parent’s bonds to AAA in late September.

On 30 September, Falabella and Mallplaza signed two non-binding deals to reorganise part of their property, a step meant to boost growth. Fitch said the group’s cash and debt maturities leave room to fund its US$900 million investment plan in stores, malls and technology.

General manager Alejandro González Dale, who runs the group, called the upgrade a recognition of the progress the company has made, La Tercera reported. Diario Financiero quoted him as saying Falabella is now in a favourable position to deepen the synergies across its businesses.

Juan Pablo Harrison, the corporate manager for administration and finance, credited stronger cash generation and a steady cut in debt. He also cited disciplined management of resources, both newspapers reported.

If you hold an emerging-market bond fund, BBB gives the retail giant Falabella more room before any cut could push it into junk. Many US pension funds and insurers may only own debt rated investment grade by the main agencies.

For shoppers and visitors, Falabella is the name on department stores and Sodimac stores in Chile, Peru and Colombia. Banco Falabella, its consumer bank, offers credit cards and everyday accounts in Chile.

A stronger rating usually lowers what a company pays to borrow, which can free money for stores, online sales and the bank. Thursday’s trading in Santiago will show whether investors had already priced in the move ( Chile market report, 14 October ).

It is not known whether S&P will follow with an upgrade of its own, or when. It is also open how much less the retail giant Falabella will pay on its next bond sale.

It is also unclear whether the margin gains will hold in what the company called a tougher climate for consumer spending. Its third-quarter results, the next scheduled report, will give the first answer.

Falabella is a Chilean retail group that runs department stores, Sodimac home-improvement stores, Tottus supermarkets, Banco Falabella and Mallplaza malls. Its shares trade on the Santiago stock exchange under the ticker FALABELLA.

Fitch raised the retail giant Falabella to BBB from BBB- on its international scale, with a stable outlook. On Chile’s national scale, Falabella and Sodimac rose to AA(cl) from AA-(cl).

Fitch cited stronger margins, more cash, lower debt and less borrowing relative to earnings. It also pointed to the group’s market position and the spread of its businesses.

Yes, Fitch restored Falabella to investment grade in October 2025 and has now lifted it one more step. S&P Global Ratings also rates the group investment grade, at BBB-.

Sources: Diario Financiero , 14 October 2026; La Tercera (Pulso) , 14 October 2026; Grupo Falabella Investor Relations (Fitch upgrade to BBB-, 2025) , 30 October 2025; Grupo Falabella Investor Relations (S&P upgrade) , 1 April 2026; Grupo Falabella Investor Relations (second-quarter results) , 11 August 2026; Grupo Falabella Investor Relations (investment plan) , 19 January 2026; Grupo Falabella Investor Relations (Feller Rate, Mallplaza bonds) , 25 September 2026; Grupo Falabella Investor Relations (Mallplaza agreements) , 30 September 2026.

Editorial responsibility: Matthias Camenzind , Editor-in-Chief · Editorial standards · Report an error

LatAm Markets: Live Signals →, real-time movers, turnover leaders and FX across Latin America.