What: Fitch upgrades Falabella’s credit rating to BBB- with a stable outlook, recognising its financial recovery and operational discipline.

Why it is important: This recovery demonstrates how disciplined financial management and debt reduction can restore investor confidence in retail.

Falabella has achieved a significant milestone by regaining its investment grade rating from Fitch Ratings, nearly two years after losing it during a period of financial strain and high debt. The upgrade to BBB- with a stable outlook reflects the company’s successful efforts to boost profitability and drastically reduce its debt-to-EBITDA ratio from 8.2 to 1.9 times within eighteen months. This financial turnaround was driven by a focused strategy on core retail and financial services, operational efficiencies, and strict cost control, resulting in EBITDA margins of around 13%. Executive leadership, particularly CEO Alejandro González and CFO Juan Pablo Harrison, played a pivotal role in steering the company through this recovery, emphasising financial discipline and improved cash flow. The restored rating not only enhances Falabella’s reputation but also provides access to more affordable financing, supporting further investment in modernisation, store expansion, and digital channels. This achievement consolidates Falabella’s leadership in the region and demonstrates the importance of robust financial management in navigating challenging market conditions.

IADS Notes: Falabella’s credit rating upgrade in October 2025 reflects a wider industry pattern, as seen with Fitch’s upgrade of Falabella’s outlook to stable in November 2024 (Peru Retail), El Corte Inglés’ outlook revision to positive in June 2025 (Fitch Ratings), and Macy’s refinancing and BBB- rating in July 2025 (WWD), where operational efficiency and deleveraging restored market confidence. Executive leadership has been crucial, with trusted leaders at El Corte Inglés and Macy’s driving modernisation and investment, as highlighted in January 2025 (Fortune) and October 2025 (WWD). Affordable financing, demonstrated by Falabella’s logistics investments in February 2025 (America Retail) and Central Retail’s expansion in June 2025 (Forbes), continues to enable strategic growth and digital transformation across the retail sector.

Fitch raised Falabella's rating to BBB-, with stable outlook