Department Stores in Brazil

PROSPECTS

Impressive outlet expansion by Havan leads to improved performance for department stores

Following a period of undynamic growth in Brazil, department stores experienced a much improved performance in 2019, recording strong growth in both outlet numbers and current value terms, a trend that is predicted to continue into the forecast period as increasingly confident Brazilians start to spend money on a higher number of non-essential items. Department stores is comprised of three chained brands, Pernambucanas, Havan and Lojas Yamada, all of which have a mid-price positioning, resulting in a distinct lack of luxury department stores in Brazil at the end of the review period.

Pernambucanas attempts to maintain dominant network of stores

Pernambucanas from Arthur Lundgren Tecidos SA - Casas Pernambucanas has continued to invest in outlet expansion in an attempt to maintain its dominant network of stores, although it continued to lose ground to Havan in 2019. The retailer also reviewed its product portfolio and decided to stop selling consumer appliances in 2016 to focus on apparel.

Pernambucanas expands to digital accounts

In line with an increasingly digital landscape within retailing, Pernambucanas is now included in a group of retailers from a number of channels that have invested in launching digital accounts. While already offering consumers its own store cards, where they can take advantage of payment for goods through instalments and accumulating points through its MasterCard Surpreenda loyalty programme, a digital strategy allows Pernambucanas to not only target established customers but also those who had not signed up for a store card, as the latter is not mandatory.

COMPETITIVE LANDSCAPE

Havan continues to gain share with dynamic outlet growth

Havan Lojas de Departamento Ltda strengthened its overall leadership of department stores in value share terms in 2019, gaining ground by rapidly opening stores in the country. The retailer’s plan is to continue strongly expanding its network up until 2022, mainly focusing on northern and northeastern Brazil.

Pilot project for Pernambucanas and Avon

Pernambucanas looks to offer customers innovative digital solution

Although recording low positive value growth in 2019, Pernambucanas continued to lose share to the dynamic Havan, and has therefore continued to look at ways to regain some ground. Therefore, it has continued to invest in digital innovation with the introduction of digital accounts for customers, which it has developed through its fintech solution Pefisa.

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