Tag Archives: retail

Lady Gaga wears Schultz, posts on Instagram and helps the brand in US expansion

A free endorsement of Lady Gaga is a great way to start a foray into the US market even though it seems that the retail landscape could turn into a kind of desert.

The singer and fashion icon posted on Instagram on Saturday (9) photos of her posing in Dallas with a pair of Schutz high-heeled leather shoes. Facing a fashion emergency considering Gaga’s nearly 27 million followers, Brazil’s Arezzo Indústria e Comércio, owner of the Schutz brand, quickly filled a plane and shipped it to the US.

We will send “whatever it takes,” Daniel Levy, chief financial officer of Arezzo & Co, said in an interview at Bloomberg’s Sao Paulo office.

He also quoted Kate Middleton and Gigi Hadid as fans of Schutz. “We did not pay.” A post like Lady Gaga’s, he said, “would be worth $ 100,000.”

The timing could not be better for Arezzo & Co, who has a staff of 25 people in New York and is about to open its first two Schutz stores, probably on the East Coast in 2018.

It’s a bold move at a time when other retailers are closing dozens of stores – Michael Kors could close as much as 125 – and rivals like Kate Spade are being devoured. In addition, this year’s forecast for US retail sales was reduced by the National Retail Federation after the country’s Census Bureau changed personal income and consumer values.

However, Schutz is confident that this is the right time and place to make a bet.

“We are financially sound. We are a strong cash generator and we have an extremely efficient working capital structure”, said Levy.

The Schutz brand is already sold at Nordstrom and at multi-brand stores in Beverly Hills and New York. Next year, Arezzo & Co will open at least two stores on the East Coast, possibly at the Short Hills mall in New Jersey and the Aventura Mall in Florida. If these stores perform well, Arezzo will redouble its commitment in 2019. According to Levy, the brand is better than Steve Madden and cheaper than Stuart Weitzman.

Luxottica to Acquire Brazilian Óticas Carol for € 110 million

Loja Óticas CarolThe Italian company Luxottica, largest company in the world for glasses, will buy Óticas Carol for € 110 million (R$ 368.6 million). The agreement was signed with the partners of the Brazilian company 3i Group, Neuberger Berman and Siguler Guff & Company, and depends on the approval of the Administrative Council of Economic Defense (Cade) to be concluded. Ronaldo Pereira, president of Óticas Carol, said that the request for approval will be sent to Cade in the coming days. The expectation is to complete the purchase this semester.

Read more about M&A in Brazil

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The acquisition is the first move by the Italian group since the global acquisition two weeks ago of France’s Essilor International for € 46.3 billion. This operation gives rise to the largest global company of glasses and lenses, with market share of 32% in the world and 28.3% in Brazil, according to Euromonitor International.

The purchase of Óticas Carol in Brazil will lead Luxottica to the leadership in the optical market as well. Óticas Carol has 950 stores in operation in the country and closed 2016 with revenues of R$ 813.7 million, a result 21.4% higher than in 2015. Its market share is 2.3%, according to Euromonitor International .

In a statement, the president of Luxottica, Leonardo Del Vecchio, said the company will verticalize its operation in Brazil with the purchase. Overall, Luxottica has 12 optical networks and a total of 7,400 stores in operation on five continents. From January to September 2016, the company’s retail revenue grew 5.7% to € 3.297 billion and accounted for 81% of total revenue. Total revenue in the period rose 0.2% to € 4.085 billion.

In the Brazilian retail market, Luxottica entered in 2011 with the Sunglass Hut network, which reached 100 stores in the country in 2016, being 73 own units and 27 franchises. The goal was to reach 200 units in five years. “Luxottica has a major retail operation in the international market, but faced difficulties in Brazil to grow in this area, due to the complexity of the sector,” Pereira said.

Óticas Carol president added that with the purchase, the retailer gains a more robust structure to carry out its expansion plan. For 2017, Óticas Carol aims to open 175 franchise stores and reach a revenue of R$ 918 million. Pereira said that this goal can be changed in the coming months, depending on the definitions that Luxottica takes on the network.

Asked about the maintenance of two optical retail chains in the country, Luxottica reported that “Óticas Carol has proved to be efficient and effective in the market” and that “it is too early to discuss the future of Sunglass Hut, since the acquisition still needs Be approved by Cade. ”

The Brazilian optical market is very pulverized, with approximately 26 thousand companies in the country, according to the Brazilian Optical Industry Association (Abióptica). In addition to Óticas Carol, Óculos Diniz is among the leaders, with more than 900 stores, followed by Chilli Beans, with just over 700 units. The other networks have less than 100 stores.

For the president of the Abioptica, Bento Alcoforado, the acquisition will have limited effect in the sector. “Even if Óticas Carol opens another 150 stores this year, it will continue with a very small portion of the market,” said Alcoforado. He considers it possible to see new acquisitions in the sector throughout the year, as the Brazilian economy shows signs of improvement. Last year, the sector shrank 17% in revenues, to R$ 16.9 billion.

The deal between Luxottica and Óticas Carol took about a year. As part of the agreement, the contracts of Ronaldo Pereira and the directors of the retailer were renewed for another three years. Luxottica will continue to provide its frames and lenses to other retail chains in addition to Óticas Carol in the country.

Read more about M&A in Brazil

Or read more about Brazilian retail

Pão de Açucar (CBD) Post 6% Sales Growth in Q2. Highlight is Food Sales

Grupo Pão de Açúcar (NYSE:CBD) reported net revenue of R$ 16.1 billion in the second quarter 2015, representing an increase of 6% year over year. The food segment rose 6.4% on the same basis of comparison, to R$ 8.95 billion, and non-food has advanced 5.3% to R$ 7.17 billion.

pao-de-acucarAccording to the company, the quarter sales performance was negatively impacted by the effects of the Football World Cup, which took place in the same period of 2014 and Easter sales, which happened partially in the first quarter of 2015 and in the previous year it had happened all during the second quarter.

CBD also states that the more cautious consumer landscape, due to the macroeconomic environment, affected the performance of the quarter.

Same store sales retreated 2.9% in April, May and June, with a negative highlight to Via Varejo (which includes the brands Casas Bahia and Ponto Frio), and fell by 23.5% in this indicator.

Within the food segment, multivarejo, which includes the brands Extra and Pão de Açucar, had an improvement of 0.7% in revenue in the quarter to R$ 6.51 billion.

Assaí, which is the group’s wholesale chain, was the positive highlight with a high of 25.6% to R$ 2.45 billion, with same store sales above inflation and market share gain.

The food segment opened 141 stores in the last 12 months, being 120 proximity (small) stores, seven Pão de Açucar four Extra, nine Assaí and one drugstore.

Within the non-food segment, Via Varejo’s sales fell 21.7% in the quarter to R$ 4.32 billion.

The sale of televisions retreated 56.6% over the previous year, with an impact of 10 percentage points in the total fall. The main factor for this performance was the strong TV sales performance during the Soccer World Cup last year.

The company claims that a number of additional measures have been implemented to adjust its expense structure, covering all operational and administrative areas, in order to mitigate the effects of inflation on fixed costs and the lower dilution of expenses.

CVS Puts Negotiations for Acquisition in Brazil on Hold

American pharmacy chain CVS has put on hold the negotiations for acquisition of DPSP group, owner of pharmacy chains Pacheco and Drogaria São Paulo, after the multinational decided to hold on plans of further acquisitions, according to a party close to the companies. CVS still considers the business as a strategic and interesting asset, therefore, the possibility that the transaction could be closed in the future is not ruled out.

CVS is holding a bit on acquisitions after the two large recent ones in a very short period of time, in which they spent US$ 12 billion and raised the debt/EBITDA ratio to 3.2. Their target is 2.7. They need to digest these acquisitions better and reduce the effects on its debt.

With R$ 6.1 billion in revenue last year, group DPSP has around 950 stores in Brazil. CVS already owns the chain Onofre, with 47 stores. According to sources, the value of the acquisition is around R$ 6 billion (approximately US$ 2 billion), same value paid by CVS to acquire the Target pharmacies.

Brazilian pharmacy retail market is going through consolidation in recent years and this consolidation has created two giants Raia Drogasil (RADL) (with R$ 7.4 billion in revenue in 2014) and DPSP. The market still offers a lot of opportunities for consolidation, given the large amount of small chains and even family owned stores.

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