Magazine Luiza changes strategy
Valor Econômico
58 years old, Pernambuco State native Marcelo Silva brings with him a 31-year professional experience in retail and, as superintendent of Magazine Luiza, position he has held for only six months, he should face great exposition and one of the biggest challenges of his career. The retailer headquartered in Franca, in the interior of São Paulo, wants to go public in 2010. "We are preparing the company for the IPO in the second half of 2010 or, depending on what happens, in the beginning of 2011", he says.
According to him, the company is currently striving to reduce its indebtedness, which is being made with the generation of cash. The purpose is to make the capital structure more solid before going to the São Paulo Stock Exchange, with financial indicators similar to those presented by the retailers listed in the stock market. Until then, the focus will not be aimed at making major investments, such as acquisitions or the opening of many stores. "These will be projects to be developed after going public", Silva says. Magazine Luiza has already reached considerable earnings to introduce shares in the market: the gross sales will be near 4 billion (US$ 2.2 billion) in 2009 - figures nearly 25% bigger than 2008's.
Last year was a difficult one for Magazine Luiza. Before the crisis, the company spent what it could in order to support a great-style arrival in the capital of São Paulo. 200 million (US$ 111 million) was invested in the simultaneous opening of nearly 50 stores in the capital. At that time, the chain foresaw it would go public and that it could raise the funds to support the expansion. The São Paulo stores, however, were open in the terrible month of September of 2008, which became known in history as the mark of the crisis right after the collapse of the Lehman Brothers bank.
"The 2009 balance sheet of Magazine Luiza will be very different from 2008's. It will show a much more comfortable position", says Silva, the first professional to hold the office of CEO in the company of the Trajano family. Luiza Helena, niece of the founder, transferred to him the everyday businesses, but she still holds one position above him, as president, with an active voice in the management.