ESSENTIAL FACT
COMPANIES LA POLAR S.A.
REGISTRATION IN THE SECURITIES REGISTRY NO. 806
Santiago, April 14, 2023
Mrs. Solange Berstein Jáuregui,
President of the Financial Market Commission,
Alas. Liberator Bernardo O’Higgins N° 1449,
Santiago.
From our consideration:
On behalf of Empresas La Polar S.A. (hereinafter, the “Company”) and being duly empowered by the board of directors in a meeting held on April 13, 2023, by virtue of the provisions of Article 9 and the second paragraph of Article 102 of Law No. 18,045 on the Securities Market, and numeral 2.2 of Section 11 of General Standard No. 30 of the Market Commission Financial, I hereby report the following as an essential fact:
1.- Within the framework of the accusations and judicial complaints regarding the lack of originality or authenticity of certain garments marketed by the Company, we can inform that, after an exhaustive investigation in both Chile and Pakistan, and despite having a robust internal protocol, it was found that in some specific cases the Company was the victim of fraud or deception by the suppliers or sellers thereof, because the traceability documentation provided by them with respect to said products was false, at some stages, preventing the Company from proving the originality of the documentation with respect to certain Under Armour, Adidas and Wrangler products.
2.- The aforementioned complaints involved three containers, two of which were retained by the National Customs Service (“Customs”). These containers represent 0.16% of the total products that the Company sells annually and 2.03% of the total products that are marketed annually, through the Super Brands, Super Prices campaign, as the off-price model is called.
3.- In this context, and as the Company has repeatedly maintained, it has acted with absolute good faith throughout the purchase process of said products, assisted by the conviction that the products labeled with the Under Armour, Adidas and Wrangler brand were original and had all the documentary endorsements that accredited said quality. Likewise, the Company carried out the usual control procedures in the market for this type of wholesale business.
4.- As a consequence of the aforementioned fraud and deception of which the Company has been a victim, it will present the corresponding complaints and compensatory legal actions against the representatives of the suppliers and other persons who are responsible for the falsification of documents, fraud and other corresponding crimes.
5.- I also inform you that the Company has reached a full and total agreement with the companies Under Armour, Inc., Forus S.A. and Adidas, to put an end to the civil and criminal actions existing between the parties, reaching broad settlements that include waivers of compensation actions for infringement of industrial and intellectual property.
6.- Regarding the accusations and complaints of Customs regarding Levi’s, Kipling and Kendall + Kylie products, I inform that during the corresponding investigation carried out by the Company, the originality of said products was reliably confirmed. In these cases, all the supporting information is available regarding garments that were erroneously classified as false, which is why these records will be delivered to the relevant authorities.
7.- Finally, I inform you that the Company will continue to develop the off-price business model (Outlet), with the aim of increasing the offer of garments to its customers. Although it is a business model that represents a low percentage of the total products sold in its stores, the executive management will continue to strengthen and enhance the attributes of this model, understanding that it is an attractive system for consumers, as observed in successful cases around the world, especially in the United States of America.
In consideration of the above, no other financial effects on the assets, liabilities or results of the Company are expected, except for the provisions for contingencies already recorded in the Financial Statements as of December 2022.
Yours faithfully yours faithfully,
Manuel José Vial Claro
Vice Chairman of the Board
Empresas La Polar S.A.
Link to file in CMFChile: https://www.cmfchile.cl/sitio/aplic/serdoc/ver_sgd.php?s567=4da721226fdf5cd14f46fabddd071568VFdwQmVVMTZRVEJOUkVVeVRVUmpNRTEzUFQwPQ==&secuencia=-1&t=1682376108
