Argentina : One-Third Of Imported-Clothing Stores Close Down

The devaluation of the peso may have proven beneficial for the Argentine textile industry, but it forced many clothing-store chains selling imported garments, several of them Spanish, to close one-third of their outlets in this South American country.

Argentina had 49 imported-clothing stores in 2001, but the number dropped to 32 last year after the government scrapped the decade-old one-to-one parity between the peso and the dollar, the newspaper reported.

On the other hand, the resulting 70 percent devaluation of the peso proved to be a boon for the domestic textile industry, which posted a 179 percent jump in production due to shortages of imported clothing.

The larger imported-clothing chains were not prepared for the devaluation of the peso and could not assemble a network of local suppliers.

Mango, the Spanish-based clothing chain that opened in Argentina under the name MNG and operated six outlets by 2001, plans to pull out of the country permanently in March after it shutters its $7 million downtown Buenos Aires outlet.

Sagging sales forced Spanish designer Adolfo Dominguez to close two boutiques and keep only one store, located in one of the capital's most upscale areas.

Zara, one of Spain's largest clothing chains and a leading brand of young women's and men's fashions, closed four outlets in the interior to concentrate on its five Buenos Aires stores.

Chilean clothing store Johnson's and Dutch-based C&A responded by also cutting back from three stores and 12 stores to one and 11, respectively.

The only exception was Chile's Falabella, which last year cut 10 percent of its 900-employee staff but did not close any outlets.