Hiper Deporte S.A.C.

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Project Number: 
PE3923A-01
Expected Consideration Date by the Board: 
06/26/2012
Date Posted: 
05/18/2012
Company: 
Hiper Deporte S.A.C.
Financing Requested: 
Up to US$6 million
Sector: 
Textiles, Apparel, and Leather
Location: 
Peru
Country: 
Scope Objective: 

Hiper Deporte S.A.C. (the “Company” or "Hiper Deporte”) mainly sells athletic shoes and sportswear through retail stores. Its multisegment products, which include international brands as well as its own brand, target a wide range of consumers, including professional athletes and recreational sports participants, as well as those who enjoy wearing sports-inspired fashion. Hiper Deporte has been operating in the Peruvian market since early 2000 and since then, has actively promoted participation in sports in Peru. Hiper Deporte is one of the companies of Grupo Marathon Sports.

The IIC will be supporting the company’s investment plan with a quasi-equity loan of up to US$6 million. The funds will be used to upgrade existing retail stores and open new ones, chiefly in metropolitan Lima. The projected investments include: a) remodeling, upgrades, and furniture, and b) working capital. Through this project, the IIC would contribute to the development of the retail market for athletic shoes and sportswear in Peru and promote the population’s access to these types of products, thus encouraging participation in sports.

Environmental Review: 

Environmental Classification and Issues:

Classification: This is a category III project according to the IIC’s environmental and labor review procedure because it could produce certain effects that may be avoided or mitigated by following generally recognized performance standards, guidelines, or design criteria.  The main environmental and labor considerations related to the project are: solid waste management, fire safety, occupational health and safety, and other aspects of work.

Solid Waste Management: Solid waste management in connection with the construction and remodeling of stores, as well as in routine business activities, follows the established procedures of the shopping centers where the stores are located, which comply with local regulations.

Fire safety, personal safety, and emergency response: The stores are equipped with smoke detectors and fire extinguishers. Safety regulations meet the standards of the National Civil Defense Institute and the shopping centers where the stores are located. All the stores have emergency exits and appropriate signage. The Company is drafting occupational safety and health regulations based on the regulations already in place in other companies in its business group. Store personnel receive training to respond to fires, accidents, and earthquakes and are responsible for coordination in emergencies and the respective evacuations.

Labor Practices: Hiper Deporte complies with national labor laws. Mandatory core labor standards include:  social security benefits, freedom of association, organization of workers’ unions, prohibition of forced labor and exploitative and abusive child labor, and nondiscrimination in the workplace. Hiper Deporte’s employees are not union members. Workers and their dependents receive medical coverage from ESSALUD (Social Security medical services), and those who opt for services at an additional cost, from a health service provider company. The Company provides ongoing training in topics related to the work areas.

Social Issues: As part of its corporate social responsibility policy, Hiper Deporte provides support for athletes, children and youth from vulnerable segments of society, the fight against breast cancer, foundations that assist people with disabilities, and other socially relevant campaigns. It also supports campaigns to protect and raise awareness about the environment, such as water conservation, reforestation, and recycling campaigns.

Oversight and Compliance: Hiper Deporte shall prepare an Environmental and Social Action Plan (ESAP) to ensure its compliance with national standards and IIC guidelines in the areas of environment and occupational safety and health. The ESAP shall provide for a yearly report on: training programs on health, occupational safety, and emergency response, as well as progress in implementation of the occupational safety and health regulations.