Sao Paulo – retail giants disputed purchase Netshoes finally the winner announced last Monday (29). Magazine Luiza won the race, but there is still a hell of a call ahead before it can claim victory: to show that it can stop the bleeding Netshoes, which can never be profitable and to use the company to be relevant in the fashion retail market.
Log in Log in sales of clothing and footwear is seen as a natural step for the company. Fashion sector is considered by experts as the next big battle arena in e-commerce. The magazine, which recently began selling books, has announced plans to become the largest e-commerce in the country.
Unlike other sectors, which cooperate with the industry to start selling products, the magazine took a shortcut in the case of fashion retailers, priced at US $ 62 million to buy Netshoes. In addition to the sporting goods brand, it also has Netshoes Zattini fashion brand of women's shoes and Shoestock.
For analysts, investors and consultants surveyed InfoMoney, business should not be of great revolution in its structure, but may put the company in a race to the market.
«Netshoes business connected to Magazine Luiza makes sense. All administrative and physical models, Netshoes had to carry back alone ready in the magazine. Costs will be eroded, "said Enrique Bredda, managing partner of Alaska asset and the main shareholder of Louise magazine in recent years.
Synergy Magazine and Netshoes business goes through several common points of retail mergers, such as the integration platform, infrastructure and people. According to the person close to the Magazine Luiza, Marcio Kumruian, president and founder of the sports retail power should remain with the company.
Graziela Kumruain, Director of Operations and sister Netshoes Marcio in will also continue in the management of the company, according to this source. On the one hand, Marcio experience and Graziela clothing and sports retailers may be useful, on the other hand, may lead to a breach of significant changes in business direction.
"The problem lies in the fact that the head of Kumruian with & # 39 is an entrepreneur who wants to grow the business at any cost. The magazine has the head of a public company that must deliver results quarter after quarter, "said one industry executive.
Despite the differences, the consultants believe that the history of the magazine purchase can help to call the company is in the business integration with the "starting up" in the real world retail. "The magazine has experience in the acquisition of both physical and retailers in the digital part. Integration has always focused on people and were very well done, "said Marcos Gouvea, director of consulting GS & MD Gouvea de Souza.
Nevertheless, talk about the integration of people, the magazine is to keep a piece of technology Netshoes team, according InfoMoney found. «Luiza Magazine usually does not make acquisitions and to sack anyone. Netshoes has a solid foundation for developers who need to be absorbed by the magazine, "says a source close to the seller. Tried, Luiza Magazine gave the interview & # 39; S.
In logistics, the magazine known for using very effectively called "Louise network" and chain stores to make the delivery of goods and reduce the cost of cargo transportation. InfoMoney found that currently, the company plans to keep open three distribution centers Netshoes (in Minas Gerais, Pernambuco and Sao Paulo). Centers should be integrated with other 12 Magazine Luiza.
Another important step in the integration should be called cross-selling different products within Netshoes Magazine Luiza, in the digital world as in the physical. In the physical retail, the magazine is to let customers buy Netshoes site and bring their products to one of nearly a thousand retail stores.
Thanks to this integration, Netshoes would have access to a network of shops, more than any of its competitors. Centauro, for example, has about 180 stores across the country. Outside the sports category, Renner has 550 shops.
– Netshoes actions of Georgia on the NYSE after the low-cost acquisition of Magazine Luiza
– As the action of Magazine Luiza has to react to purchase Netshoes
Another synergy based on 6 million active Netshoes customers who need to join the 17 million Magazine. "While there is an overlap between the customers of brands, 6,000,000 Netshoes bring a huge database for the magazine, with the various habits of information consumption, which should help in the magazine, in order to improve their business," says retail consultant Ana Paula Tozzi, WMO, consultants.
The challenge is to make this integration without losing focus – and maintain rapid growth, which has been a distinctive feature of the magazine, and that as a happy investor.
Together with a & # 39; true purchase, Netshoes presented its balance sheet, which shows that in 2018 the damage has doubled, and the company burned R $ 100 million of cash. Netshoes growth also slowed in the past year, even with its reputation for adopting aggressive growth strategies.
"The injury has always been problematic in Netshoes. But now the company has no money to pay short-term debts. This is a company that can break if it was not sold, "he says, a consultant specializing in the field of e-commerce.
«The Moscow State Linguistic University [Magazine] He has recorded a consistent organic growth and the acquisition can generate distraction, in particular, because of the financial and operational difficulties networks [Netshoes]"According to analysts at Itaú BBA report. "If the performance of organic growth with Magazine Luiza & # 39 is the best in class, why the distraction?" Complement.
From the point of view of the box, the magazine seems to have money left to fix operation Netshoes. In addition, approximately R $ 240 million, which will pay for the company, the retailer will also assume debt of R $ 140 million. In the Journal of R $ 2,2 billion.
The Bank of America Merrill Lynch analyst report notes that, in spite of the loss-making operation, gross profit categories in which Netshoes acts is higher than in traditional retail Louise magazine. "We see the path to profitability," analysts said in the report.
Shares Magazine Luiza (mGlu3) closed Tuesday with a maximum of 7.14%. At R $ 191.26 – the highest level in history. Apparently, investors are confident that the company will overcome its latest challenge.
On the & # 39; is a member of the best companies in Brazil, open a free account on a clear ZERO fee for brokering the action!