Centauro invests to double chain size until 2012
Valor Econômico
It is still early to know if Brazil will win any medal or trophy in the upcoming sporting events it will host, but Sebastião Bonfim Filho, owner of the retail chain of sports articles Centauro is already celebrating. The optimism of the entrepreneur, founder of Grupo SBF, which also owns the By Tennis chain and the license of the Nike Store in Brazil, has to do with its businesses. He foresees this will be the "golden decade" for the company. By the end of 2012, before the FIFA Confederations Cup and the Soccer World CupTM, the group plans to nearly double the numbers of stores and more than double its earnings.
After closing 2009 with 150 physical stores and the virtual business (centauro.com.br), Bonfim Filho planned the opening of 139 stores in the coming years. All at shopping malls, continuing with the current strategy of the group. The annual earnings should go from R$ 1.6 billion (US$ 888.9 million) foreseen for this year to R$ 3.5 billion (US$ 1.9 billion) in 2012, according to the plan. It is with such size and the getting closer to the sports events that the entrepreneur who created the business in 1981, intends to take the company to the BM&FBovespa. "In the beginning, I only wanted to sell t-shirts and sports shoes", he says playfully. He invested US$ 10.5 thousand in the first store, in Belo Horizonte (MG). Today, he dedicates himself to bolder plans such as being one of the ten biggest groups of sports articles in the world by the end of this decade without leaving Brazil. Currently, it is the largest group of Latin America. Little by little, Bonfim Filho prepares to go public, which he expects will take place in 2012. The goal with such move is raising capital, seeking the perpetuity of the business and gaining liquidity for at least part of his assets.
The group will have invested nearly R$ 350 million (US$ 194.4 million) in such growth project by the end of 2012. The funds, according to Bomfim Filho, will come from the BNDES (National Development Bank), from Banco do Nordeste (Northeastern Bank) and from the cash generation of the business itself. The entrepreneur believes the margin of the business is slightly bigger than that of the traditional retail because it is a niche. In 2009, the company had earnings of R$ 1.1 billion (US$ 558.4 million) and Earnings Before Taxes, Interest, Depreciation and Amortization (EBTIDA) of R$ 120 million (US$ 60.9 million). After all the changes in the management, it is expected that the margin remains between 15% and 20% with gain in efficiency. As regards the net margin, it shall range from 4.5% to 5.0%. The net debt, at the end of last year, was nearly R$ 250 million (US$ 126.9 million).
After all such plan has been implemented, Bonfim Filho bets the reality of the market of sports articles in Brazil will be quite different from what it currently is - much bigger. "I have seen the effect the Cup and the Olympics have on a country. It will never be the same again. Sport will be much more inserted in the life of the Brazilian people".