Venezuela's Economic Crisis Catches up With Malls
Staring through a glass storefront at the Sambil shopping mall, Aleimar
Sanchez sees more than a struggling business in the near-empty shelves
of a Casio electronics store. She sees a country in sad decline.
Since its inauguration in 1999, Caracas' biggest mall has been a hive of
frenzied shopping, a glitzy counterpoint to the anti-capitalist tirades
of the late Hugo Chavez. Today, a few die-hard shoppers stroll through
dimly lit corridors, past stained walls in need of a paint job, and
shuttered boutiques. In those stores that are open, employees spread out
their dwindling supply of garments, cellphones and designer bags on
shelves and window displays.
Fifteen years of socialist rule and an acute economic crisis is catching
up with Venezuela's shopping malls, once impenetrable oases of
consumerism where rich and poor alike sought refuge from crime-ridden
streets.
"It makes you bitter to think that a country so rich is sinking deeper
into ruin every day," said Sanchez, a 39-year-old sales clerk visiting
from Puerto Ordaz in southern Venezuela, where she said shelves are even
more barren.
While a decade of rigid price controls long ago forced Venezuelans to
scavenge for basic goods like toilet paper and corn flour, an oil-fueled
spending boom and hands-off approach to less-essential parts of the
economy had always left stores filled with North Face jackets and Louis
Vuitton handbags, catering to the well-off looking display their social
status with designer brands.
Things started to change with the election a year ago of President
Nicolas Maduro and the onset of an economic crisis that has been the
main driver of deadly protests shaking the country over the past three
months.
With the supply of dollars drying up as oil production wanes, imports
have fallen and shortages have hit record levels. Meanwhile, galloping
57 percent inflation is eroding families' purchasing power.
Maduro says the problems are a result of price gouging and hoarding by
opposition-aligned merchants waging an "economic war" to destabilize his
government.
His response has sent shockwaves through the retail industry. In
November, he seized a nationwide chain of appliance stores and slashed
prices on fridges, plasma TVs and computers. The fire sale, which
emptied the shelves, was followed by an even more devastating blow to
business: a freeze on commercial rents at rates more than 50 percent
lower than they had been at some malls.
The retail landscape has never looked more forlorn.
Incomes for shopping malls plummeted by as much as 75 percent as a
result of the rent freeze, according to Claudia Itriago, director of the
Venezuelan Chamber of Shopping Centers.
Malls that were a rare magnet for investment under Chavez are now at
risk of shutting down. To reduce costs, many are cutting back on frills
such as holiday displays, and even essential services like cleaning and
air conditioning. At Sambil, many of its escalators sit idle for lack of
maintenance.
At Tolon Mall, one of the capital's most chic shopping spots, dozens of
stores are closed on any given day. Strict labor laws make it nearly
impossible to fire workers. So to get around the juggernaut and reduce
payroll costs, many stores don't bother to open every day. When they do,
bored clerks fiddle with their cell phones and flip through magazines.
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