Brazilian retailer Americanas: store sales return to pre-crisis level but digital sales drop 90%

By Daniel Cancel

Americanas, the Brazilian retailer under judicial reorganization since January after disclosing a R$20 billion accounting hole, received good news in April: sales in physical stores recovered to pre-crisis levels.

However, other indicators have continued to deteriorate.

Sales in physical stores increased 37% in April compared to March, to R$1.5 billion (US$299 million), the best month since last December, according to a monthly operating report from the company’s court-appointed administrator.

The company’s cash position also improved from a low in March: there was about R$1.4 billion.

Still, sales through the company’s digital platform continued to fall: total revenue was down 90 percent from May 2022.

The news worries because the average sales ticket on the digital platform is R$294, compared to only R$8.40 in physical stores, according to the report.

The Rio de Janeiro-based company said in a recent document that it had drawn some interest from potentially interested parties in the Ame fintech that and could add it to its divestment program along with other brands such as Uni.co and the Hortifruti Natural da Terra chain.

Americanas has hired Citigroup (C) to help find buyers for some assets.

Americanas registered 1,851 stores in April, five less than in March, and lost active clients: about 45.1 million against 49.5 million at the end of December.

According to the report, investments were R$7.2 million in the month of April, by far the lowest monthly amount of last year.

Total employees stood at 38,847, down from 39,291 in March.

The retailer, which counts billionaire founders Jorge Paulo Lemann, Marcel Telles, and Carlos Alberto Sicupira of acquisitions firm 3G Capital as its largest shareholders, decided to seek judicial protection from creditors in January after then-new CEO Sergio Rial denounced the existence of “accounting inconsistencies” on the order of R$20 billion, effectively doubling the company’s liabilities.

The company’s shares have accumulated an 88% drop this year, with a market value of R$993 million.

The dollar bonds are traded for around 20 cents.

Americanas said in the report that it continues discussions with creditors without saying when an agreement could be reached.

“Although we have not yet formalized an agreement with the creditors, there is a predisposition to negotiate in good faith,” the company told the trustee.

“As is customary in such negotiations, some details are still being discussed.”

With information from Bloomberg

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