Urgent! Owner of Casas Bahia To Close 100 Stores and Lay Off 6,000 Employees By Year-End

Written by Valdemar Medeiros

Published on 12/08/2023 at 18:26

Foto: Divulgação/Casas Bahia

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Owner of Casas Bahia Will Close About 100 Stores Due to Huge Net Loss of R$ 492 Million. The Closure Will Result in Mass Layoffs of Up to 6,000 Employees.

Via, owner of Casas Bahia and Ponto, announced last Thursday (10) a new business plan that includes a reduction of up to R$ 1 billion in inventory in 2023, as well as a change in the way it raises funds to finance credit. The estimate is that the owner of Casas Bahia will close 50 to 100 stores by December this year, resulting in mass layoffs of up to 6,000 employees.

Owner of Casas Bahia Had a Loss of R$ 492 Million

The restructuring of the business, which will end with mass layoffs, is associated with the company’s second-quarter results this year, which showed a net loss of R$ 492 million. This result reverses the profit of R$ 6 million reported in the same period last year.

Adjusted EBITDA was R$ 469 million, down 32% from the reported figure of April to June 2022, with a margin of 9%, 2.7 percentage points lower than a year ago. The net revenue of the owner of Casas Bahia, in turn, fell by 2%, reaching R$ 7.5 billion.

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Via, Owner of Casas Bahia Chain, Will Close Units After Management Change

In a conference with analysts last Friday (11), Via’s president, Renato Horta Franklin, stated that he plans to capture almost all the benefits of his new business plan starting in December.

According to Franklin, the forecast does not include the monetization of credit financing for Investment Funds in Credit Rights (FIDC), which requires a bit more time. The transformation of the owner of Casas Bahia, which may lead to mass layoffs, occurs after a change in the senior management of the company during the second quarter of this year.

Renato Horta Franklin left the car rental company Movida to take over the presidency of the retailer, and Elcio Mitsuhiro, who previously worked for the automotive parts maker iochpe-Maxion and the food sector company BRF, now holds the position of finance director.

Franklin explains that the company already had a growth strategy focused on sales through digital channels, as well as opening new channels, expanding stores, and investing in fintechs.

According to the executive, VIA understands that all of this has been done. A super platform has already been built, and it is large. So, investing to grow more or to monetize what it already has, leading to mass layoffs, is preferable to making money with what is already available.

40% Reduction in Investments from the Owner of Casas Bahia

Via also announced plans to mitigate its investments by up to 40%. With the implementation of these disclosed operational transformations, the company estimates it can generate R$ 1 billion in net profit, not accounting for income tax, but does not know when.

The company’s plan, which may lead to mass layoffs, encompasses a series of significant profit gains until 2025. Mitsuhiro emphasized, however, that this is not a plan that will take until 2025, without providing details about the timeline.

Urgent! Owner of Casas Bahia To Close 100 Stores and Lay Off 6,000 Employees By Year-End

Owner of Casas Bahia Will Close About 100 Stores Due to Huge Net Loss of R$ 492 Million. The Closure Will Result in Mass Layoffs of Up to 6,000 Employees.

Owner of Casas Bahia Had a Loss of R$ 492 Million

Via, Owner of Casas Bahia Chain, Will Close Units After Management Change

40% Reduction in Investments from the Owner of Casas Bahia

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Urgent! Owner of Casas Bahia To Close 100 Stores and Lay Off 6,000 Employees By Year-End

Owner of Casas Bahia Will Close About 100 Stores Due to Huge Net Loss of R$ 492 Million. The Closure Will Result in Mass Layoffs of Up to 6,000 Employees.

Owner of Casas Bahia Had a Loss of R$ 492 Million

Via, Owner of Casas Bahia Chain, Will Close Units After Management Change

40% Reduction in Investments from the Owner of Casas Bahia

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He transformed an abandoned plastic water tank into an underground house in the “hobbit hole” style, using only repurposed pallet wood, without heavy machinery or expensive labor.

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