Le Postiche Changes the Stores Portfolio

Valor Econômico - 08/21/2017

By Tatiane Bertolozi

Le Postiche, the most important bags and accessories retailer in the Country, leaves its second reorganization in a decade directing the business to the more affluent public. The new targeting comes after the company restructured its finances, reviewed suppliers, and outsourced the logistics operation.

The company, which is expected to reach 78 own stores and 145 licensed units in September, expects to reach sales of R $ 460 million to the final consumer in 2017.

In July sales increased by 5% on the same-store basis, which compares the performance of open points for at least 12 months. The restraint trend of the first months of the year began to be reversed in May.

"The economy recovers at a slower rate than we expected, but the expectation is to end the year with a 7% advance seeking a 10% increase in 2018," says the president of the company, Carlos Eduardo Padula. In the past year the decline in same-store sales was 5%.

Opened in 1978, Le Postiche has grown as a retailer of products for travel of various brands, selling imported items, and then own brand. In 2010, it outlined a plan to consolidate its presence with the female public of classes B and C.

The economic crisis came and, in 2014, led by the two daughters of founder Álvaro Restanho and directors, the company hired consulting firm Performa Partners to professionalize the business. The work was completed earlier this year, and in February Carlos Eduardo Padula, a former Hope and Loungerie executive, became the company's lead after the transition with the consultancy.

After the internal changes, the company is gradually changing the look of the stores, in a project that raises the exposed items by 30%. The portfolio, however, should be smaller, with fewer suppliers. "Any supplier now has to go through two screens, that of exclusivity and profitability," says Padula.

The company has partnered with the Santa Marinella brand, owner of its own stores, but without multibrand sales, and has contracts with Uncle K, Farm, BoBô and Ana Hickman. In October, it will bring to the country the brand of luggage Echolac, which belongs to the Japanese group Mitsubishi and is a direct rival of Samsonite.

Three years ago, Le Postiche's portfolio was in the price range of $ 79 to $ 179. Today it is between $ 129 and $ 399. Under the new business policy, deals will be less frequent and store managers will less autonomy to give discounts. This should add from R $ 2 million to R $ 3 million in margin, according to the President.

As part of the financial restructuring, the company outsourced the logistics operation to Volo, which operates with brands such as Farm and Lacoste. The change should allow savings of R$1.8 million per year. Le Postiche operated with its own distribution centers, in Vitória (ES) and Barueri (SP). In 2016, it started to use only one center in Cajamar (SP), until outsourcing the operation this year.

The ratio of net debt to earnings before interest, taxes, depreciation and amortization (Ebitda) went from almost 4 times to 2 times in 2016, through renegotiation with the banks and the founder's contribution. In December, that ratio is expected to fall to around one and a half, Padula says.

The remodeling in the Le Postiche stores occurs at a time when large manufacturers of bags invest in the Brazilian retail with their own stores or franchises. Samsonite intends to open 50 franchised units and 50 own units in the country by 2018. The rival Primicia plans to open 100 franchises in five years.

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