A Espadrilles, owner of the brands Havaianas e Osklen, made a fourth quarter to break the block. The company’s net revenue reached R $ 1.1 billion, an increase of 10.5% over the same period last year. “It is the best performance in the entire history of the company, even when considering the previous years full, with the brands that were sold and the operation in Argentina [de tecidos]”, Commented Roberto Funari, in an interview with EXAME IN.
The company has been demobilizing assets and brands it has not considered central since 2018, a process that ended last year with the sale of Mizuno’s license. These other banners accounted for 25% of revenue two years ago and a share of 36% in 2016. The fourth quarter of the pandemic, therefore, entered the history of the century-old company.
The company’s performance in the digital field, of course, could not fail to be in the year of the pandemic. But, as Funari defined it, the company promoted a paradigm break, with a “resignification of physical retail”. This occurred in Brazil and also in the international operation. The company’s e-commerce operation is still quite small.
Both in Brazil and in the foreign market, Alpargatas adopted a more versatile model of operation, with retail within retail, that is, points of sale in places that were open during the pandemic. The company ended the year with 300 thousand active points, an increase of 40 thousand in the middle of 2020. But, in addition to the changes related to the covid, there is a definite redesign
Outside the country, the company closed 26 own stores in the comparison between December 2020 and 2019. The highlights of this adjustment, according to the company president, were the United States with ten stores, Europe with five and India with seven. From now on, the physical presence abroad will be concentrated in the pop-up model, temporary kiosks in galleries and shopping malls, and concession, within large department chains. And online sales outside Brazil already account for 40% of the total.
The operation’s recurring Ebitda reached R $ 283 million in the last three months of the year, with a margin of 25.6%. “This indicator was also never seen in the company. It was a business that historically had margins of 10% to 13% ”, highlights the executive. If only Brazil is considered, the margin reached 31%.
The consolidated performance suffered from the negative margin, that is, consumption of resources, generated by the international operation, since the Ebitda of foreign sales was negative by R $ 15 million. This is the recurring data, which excludes extraordinary events. The reason was the sharp drop in volumes, which fell 20% due to the pandemic.
The exchange rate, however, favored external net revenue, which increased by more than 12.4%, to R $ 150.5 million, and helped in the composition of the whole. “When the international volume normalizes, the margins will be positive and important. If you exclude an effect of reclassification from expense to cost, the gross margin outside Brazil increased by 7% ”, says Funari, who never tires of repeating – and apologizes for that – about the performance he calls“ exceptional ”of the fourth quarter and “the entire second half of the year”.
In the hype that was 2020, net income for the fourth quarter had a symbolic increase of 0.6% and totaled R $ 203 million. This is the amount that would be recurring. The actual number, which happened, suffered a negative impact from the costs of separating Mizuno and the closing of international stores: it fell 55% and reached R $ 53 million.
Sum of this, take it away, Alpargatas ended last year with a net financial position of more than R $ 460 million, compared to almost R $ 300 million in 2019 – an increase of more than 50%. With money left over (more cash than debt), Funari repeats the speech when asked about acquisitions: inorganic expansion is on the radar, but only when it makes a lot of sense in combination with the Havaianas positioning and it can be global.
On the network
Alpargatas, with Havaianas, went against the consumer and retail sector and Funari knows this. The digital operation with its own global channel was only organized from October last year. The pandemic was overcome, in the race, in the physical retail.
Of the 73 million pairs of Hawaiians sold in the fourth quarter, only 5 million were e-commerce. But to ask Funari how much this channel can represent with the consolidation of the model is to hear a Chinese response. For him, it doesn’t matter where the customer buys, it has to be where he wants. The important thing is that you have everything available. The point is that, in the executive’s view, very soon 100% of sales, no matter the channel, will be influenced by the digital world. Today, the estimate is that this percentage is 70%.
The digital channel, according to the executive, gives an important uniqueness and campaigns and launches can happen globally.
Of all 500 Havaianas stores, only 110 operated with omnichannel structure at the end of last year. But the plan is to reach 100% of the network by the end of this year.
Alpargatas chose, as one of its strategic pillars, international expansion with a greater focus on Europe, the United States and China. While in Europe the presence is more consolidated, as it is older, China is new. But the company has already managed to stand out and ended 2020 just behind Nike, in international brands in the country, in open shoes. Annual revenue was R $ 28 million, an increase of almost 500% even with a pandemic. It’s little, the company knows. For now, just put a foot over there. But the planned pace of the stride is high.
In December, Havaianas had 10 stores dedicated to the brand, 200 wholesale pop ups, presence in four online market places, a sum of 10 million unique visitors and more than 600 thousand followers on social networks. As Funari said in the company’s last ‘investor day’, there “any piece is in the millions.”