Executive Briefings

Government Import Controls Cause Luxury Goods Retailers to Move Out of Argentina

A slew of luxury goods retailers are leaving Argentina in response to import barriers, currency controls and soaring inflation.   American designer Ralph Lauren was the most recent departure when it announced last month that it was closing three of its stores in Buenos Aires, including its flagship in the upscale Recoleta district, as draconian measures on imports have all but left it unable to stock its shelves.

Ermenegildo Zegna, Escada, and Calvin Klein Underwear had already closed or reduced operations sharply in response to the growing challenges to doing business in the country. Local media outlets reported French jewelry boutique Cartier is planning to follow suit next month.

President Cristina Fernández late last year tightened controls on imports to protect a dwindling trade surplus. Her administration also restricted access to foreign currency to prevent growing ranks of Argentines from trading their pesos for U.S. dollars to protect their savings from one of the highest inflation rates in the world.

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Ermenegildo Zegna, Escada, and Calvin Klein Underwear had already closed or reduced operations sharply in response to the growing challenges to doing business in the country. Local media outlets reported French jewelry boutique Cartier is planning to follow suit next month.

President Cristina Fernández late last year tightened controls on imports to protect a dwindling trade surplus. Her administration also restricted access to foreign currency to prevent growing ranks of Argentines from trading their pesos for U.S. dollars to protect their savings from one of the highest inflation rates in the world.

Read Full Article