After a challenging year in 2020 when department stores witnessed declining sales, the channel registered a positive performance in 2021. The pandemic led to the introduction of various restrictions to control the spread of the virus including a lockdown, which required department stores to close their doors for several weeks during Q2.
While Havan is Brazil’s leading chain of department stores in value sales terms, its major rival Pernambucanas is the leader in terms of number of outlets. With Havan having recorded strong growth in recent years, Pernambucanas has sought to invest heavily in expanding its department store network in an attempt to recover its previous leadership in value sales terms.
Both Havan and Pernambucanas count on a financial branch, offering customers their own financial products, mostly in the form of store cards. These cards typically represent a low-cost, facilitated alternative for consumers who have little access to credit, while being an additional source of revenue for retailers.
The forecast period is expected to see further growth in the outlet networks of both Havan and Pernambucanas. However, Havan could face difficulties funding its ambitious plans to open dozens of “mega-stores” after the company’s planned IPO was shelved in 2020 due to the difficulty that the retailer faced during the pandemic and disagreement on the valuation placed on the company by its CEO and owner.
Recognising the importance of diversifying sources of revenue generation is key. In this context, financial products represent an alternative avenue for growth.
With digitalisation having emerged as a key strategy for department stores to mitigate the pressures that stemmed from reduced footfall during the pandemic, the forecast period is expected to see a stronger focus on digital channels. Online marketing utilising social media will remain relevant, in addition to the increasing use of digital payment methods such as the Central Bank’s instant payments system Pix.
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Understand the latest market trends and future growth opportunities for the Department Stores industry in Brazil with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Outlets selling mainly non-grocery merchandise and at least five lines in different departments, usually with a sales area of over 2,500 sq metres and arranged over several floors. Example brands include Macy’s, Bloomingdale’s, Marks & Spencer, Harrods, Sears, JC Penney, Takashimaya, Mitsukoshi, Daimaru, Karstadt, Rinascente.See All of Our Definitions
This report originates from Passport, our Department Stores research and analysis database.
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