13 May 2009

Ripley Falls Most in 5 Months on Fear Database to Hurt Profit

By Nathan Gill
     May 13 (Bloomberg) -- Ripley Corp SA, a Chilean department-store operator, fell the most in more than five months on speculation a government proposal to create a national credit database will hurt retailers’ profits from credit card sales.
     The Santiago-based retailer dropped 4.5 percent to 360 pesos in Santiago trading at 2 p.m. New York time, the steepest drop since Dec. 1 on a closing basis. Cencosud SA, Chile’s biggest retailer, and rival La Polar SA also fell.
     Chile’s government proposed the creation of a national credit database on May 11 to strengthen consumer rights and improve equal access to credit, the finance ministry said in an e-mailed statement.
     “In Chile, financing is a very important business for retailers,” Alfredo Ugarte, an analyst at Corp Research SA, said today by phone from Santiago. “Retailers have exploited a business in the middle- and lower-middle-income segments where banks for the most part haven’t entered. With the consolidation of this database of debtors, banks could access information about these segments and in the mid-term this could create competition and pressure the retailers’ operational margins.”
     Cencosud fell 1.8 percent to 1,345 pesos. La Polar dropped 1.5 percent to 1,650 pesos.