One of the biggest paradigm shifts in the post-pandemic world is that niche segments did not fit into the portfolio of large networks. That’s definitely past. Proof is that retailer Lojas Renner, after fattening up its coffer by raising R$4 billion in a private share offering (follow on), decided to bet on the second-hand market. The group, with 606 stores and owner of the Renner, Ashua, Camicado and YouCom brands, bought Repass, an online platform for the resale of apparel, footwear and accessories. The deal, which did not have the value revealed, took place after the company closed 2020 with a 21.4% drop in sales – to R$ 6.6 billion. “It is part of our goal of being the biggest, best and most relevant lifestyle fashion ecosystem in the Americas,” said Fabio Faccio, CEO of Lojas Renner to DINHEIRO. “For this, we expanded the assortment of products, services and content, in addition to bringing more digitalization.”
The deal is still awaiting approval, but it is strategic as it focuses on a market that is gaining strength, especially among generations Z (born between 1997-2012) and millennials (1981-1996). GlobalData estimates that the retail industry will be, by 2030, twice the size of fast fashion and reach global revenues of US$ 84 billion. The adhesion of companies to this path becomes natural, mainly to prevent them from becoming outdated. This is the vision of the executive director of the Brazilian Textile Retail Association (Abvtex), Edmundo Lima. “People, especially young people, seek to join companies that share the same values and purposes,” said Lima. For him, it is essential that companies present shares in addition to repurchase items. “It is also a requirement of this consumer to have a product of greater quality and durability.”
Another Renner bet is the inauguration, this semester, of the first store focused on the circular economy. Located in Rio de Janeiro, the unit was planned in 2019 and brings news pointed out by the company as pioneers in the market. Among them, furniture made from recyclable materials, from mannequins to cashiers. In addition, an exclusive space set up for customers to have access to circular initiatives, highlighting products with the Re Seal – items that generate a lower environmental impact during their production process. The post-consumer reverse logistics service will also be highlighted.
Renner’s strategic line also includes advancing the company’s digitalization, expanding its omni presence and strengthening the group’s brand ecosystem with sellers and partners. To start this planning, in 2022 the company will open its new Distribution Center (DC) in Cabreúva, in the interior of São Paulo. With an estimated investment of R$ 600 million, the DC is bigger than the entire logistics park of the company. Automated, the unit will be used to supply stores, reducing the speed and costs of operations. “There will be synergy between the brands in addition to providing supply and logistics services to our sellers,” stated Faccio.
SHOPPING BAG Domestic innovations, however, are unlikely to overwhelm the retailer’s appetite for non-organic growth. The volume of money collected in the follow on indicates that the shopping bag has not yet been completed. For this, possible acquisitions are already being discussed. Even very discreetly, some bets are already made in the market.
XP Inc. report points out four possible fronts. In the first one, the search for digital assets. Here, market analysts place Dafiti as the darling of the negotiations, but they also map Amaro and even small niched digital natives as options. Then, multichannel fashion companies, focusing on C&A. “This seems to us to be the last hypothesis because the company demonstrates that it is looking for new fronts and not expanding the already consolidated market,” said retail analyst Danniela Eiger. The third possible front is the acquisition of technology fintechs aimed at strengthening Realize, the group’s financial arm. And finally, entry into categories such as cosmetics or home & decor.
Indicating that the funds raised should be used by the first half of 2022, the company walks through the retail market as consumers walk through the store, choosing the product they will take home, while investors, sellers and competitors watch the movement like sellers, waiting the right time to be present.