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Marisa plans to carry out store closures due to falling profits. There will be 92 units closed by the end of the year, causing the dismissal of thousands of people.
In about two months, the Marisa fashion network it started to reorganize its financial business arm, carrying out write-offs and accounting reviews of faulty classifications and set up a plan for restructuring activities and debts, still in progress, with the aim of turning the page. The actions should be finalized later this year, but the greatest impact of the revisions in expenses should arrive on the balance sheet from next year, mainly in the closing of stores, causing thousands of mass layoffs.
Marisa announces the closure of 92 stores
According to the CEO of Marisa, João Nogueira Batista, who has been in charge since February, in an interview after the release of data for the fourth quarter of last year, the company must do its part, which is this effort in expenses.
Marisa should come out of this whole process healthier, as it is unsustainable to continue burning cash and not paying a penny in dividends. The company's shares closed trading this Monday (3) on the B3 down 6,25%.
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The ongoing project, led by the new management in partnership with Galeazzi Associados, provides for the closure of 92 of the 334 stores in the coming months, 20 of which until April, causing hundreds of dismissals.
The initiative is expected to generate nearly R$70 million in earnings before interest, amortization, taxes and additional depreciation annually. This is considering the maintenance of current market conditions that impact performance. The closing of stores is equivalent to 27% of the total.
Marisa's project indicated 25 units with a negative contribution margin, unable to be maintained. Discounting these units, the total would rise to 309. However, the consultancy identified another 67 stores that would not be able to return to normal. Ebitda positively, and thus reached the closure of 92 stores.
Marisa will have R$ 100 million in Ebitda in 2024
After the closure of stores, which will bring several layoffs, annual revenue should decrease to approximately BRL 2,1 billion, which in 2022 was BRL 2,78 billion, at Mbank and retail (financial arm), and BRL 2,23 billion in retail alone. There is still a forecast of another R$ 20 million to R$ 30 million in annual reduction of operating expenses with the closures.
The CEO states that there will be R$ 100 million in new Ebitda for next year, with room to generate, at the end of this year, Ebitda of R$ 15 million. The indicator is still negative on the network, despite a recent improvement.
The chain calculated retail adjusted Ebitda of BRL 17 million for a net debt of BRL 560 million in the year. In reports, analysts warned that there is a risk of the network breaking "covenants", the indicators linked to Ebitda, which need to be respected in agreements with creditor banks.
Closures require spending of BRL 50 million
The closing of Marisa's stores will require expenses of R$ 50 million, however Nogueira understands that the pace of closing will be gradual, also due to the question of the origin of the resources.
According to the executive, the company does not have any problem with financing, reducing expenses with closing stores, however it is logical that if the Santander and other banks do not return to companies in the future, perhaps Marisa will have to slow down the SG&A reduction. However, the company is counting on doing everything by the end of this year.
In order to gain from the closure, it is necessary to spend on workers' termination and the end of rental contracts, for example. Nogueira is in charge with the objective of implementing the required adjustments, according to the endorsement of the Goldfarb family, which controls the chain of stores.
