Michell y Cia. S.A.

What it is

With more than ninety years of experience in alpaca fibre processing, Michell is today the pioneer and the leading alpaca tops and yarns producer and exporter in the world.

It makes tops and yarns for hand and machine knitting and weaving, produces garments, coats, and accessories, and sells rugs and carpets for residential and commercial use. The company is vertically integrated, meaning it controls every step of the chain, from alpaca breeding through to retail.

Export sales drive the majority of revenues — though domestic Peruvian sales jumped 32% in 2024 — while international shipments, which represent the larger share of income, dipped 2% over the same period.

Who owns it

The company was built by Frank W. Michell, who knew how to set the firm on the right path with the support of his children and grandchildren; the family has been involved in the alpaca industry since the 1920s, and it was not until 1931 that Frank W.

Michell formally founded Michell & Cía. in Arequipa as a sorter and exporter of alpaca fibre.

The board is chaired by Michael Michell Stafford, who has forty years of service to the company, and Frank Michell López de Romaña sits as a director with twenty-two years — both listed as family-related to the controlling shareholders. The precise percentage stake held by the Michell family is not disclosed in available sources.

Who runs it

Michael Michell Stafford serves as President of the Board (Presidente del Directorio), combining family ownership with executive oversight.

Mario Fiocco Cornejo, who joined in 2019, serves as senior general manager; he holds an MBA from Cornell University and has more than twenty years of experience at companies including Procter & Gamble, Alicorp, and Química Suiza. Jorge Conroy Ganoza, who joined in March 2017, serves as Administrative and Finance Manager; he holds an MBA from Tecnológico de Monterrey and has broad financial experience in local and multinational firms.

The money, in plain words

Net sales in 2024 rose 4.58% year on year to S/510,659,000 (~US$149.3M), compared with S/488,299,000 (~US$142.8M) in 2023.

Pre-tax profit came in at S/40,864,000 (~US$11.9M) in 2024, down from S/54,720,000 (~US$16.0M) in 2023 — meaning the business grew its top line but squeezed less out of each sale, with the net profit margin (our calculation) falling from roughly 11.2% to about 7.4%. That is respectable for an industrial textile exporter, though the compression is worth watching.

Debt is modest: the ratio of total debt to shareholders’ equity stands at about 49.6%, meaning the company owes roughly half of what its owners have put in — a conservative balance sheet for a manufacturer. The dividend yield of 7.32% is generous and signals the family’s comfort returning cash to shareholders even in a softer profit year.

What it is doing now

In 2024 the company invested S/33,084,000 (~US$9.7M) in new fixed assets — more than double the S/14.9 (US$4)M spent in 2023 — funded entirely from its own cash flows, with no new debt raised.

Michell has also signed a contract to operate two exclusive alpaca boutiques — Sol Alpaca and Patapampa — at the new Jorge Chávez International Airport terminal, with one store in the international zone and one in the domestic zone. Separately, the company is running a collaborative programme on alpaca genetics and reproductive technology to improve fibre quality at the farm level.

What to watch

• Export recovery. International sales — the engine of revenue — slipped 2% in 2024. Any rebound in European and Asian luxury-goods demand would feed directly into margins.
• Margin pressure. Pre-tax profit fell roughly 25% even as revenues rose. Raw-material cost trends and the sol/dollar exchange rate are the main levers.
• Capital cycle. The 2024 capex of S/33,084,000 (US$10 mn)included renewed certification programmes alongside plant investment. How quickly this modernisation translates into cost savings and output quality will determine the next profit cycle.
• Family succession. The company legacy is now carried by Derek Michell, Frank’s grandson. Leadership continuity and any eventual change in ownership structure are the long-term governance questions for outside shareholders.

This is news, not investment advice.