(The Oct. 12 story has been corrected to clarify the timing in headline and first paragraph)

MEXICO CITY (Reuters) - Chilean retailer Falabella may close between 5% and 10% of its department stores across Peru, Colombia and Chile over the next few years, its Department Store Chief Executive Francisco Irarrazaval said on Wednesday.

Irarrazaval was speaking at an investor day in New York, with other company executives.

A source close to the company said store closures were currently being considered but no final decision has been taken. It was expected that employees of stores shut down would be relocated to other shops, the person said.

The decision was part of a "constant" evaluation of the business profitability, with adjustments "based on customer demands," the source added.

Falabella - which also operates brands including Ikea in Latin America - is also preparing to open a small number of other stores this year, executives said.

(Reporting by Carolina Pulice and Isabel Woodford; editing by Richard Pullin)