Arezzo & Company, the big Brazilian shoe retailer that also owns the Schutz, Alexandre Birman and Anacapri brands of shoes, reported a sales increase of 18.9 percent in the third quarter to 188.9 million reais (€75.4m-$99.9m), as compared to a year ago. The number of shoes sold in the quarter increased by 16.9 percent to 2.21 million pairs, but the number of handbags sold rose even faster, by 35.6 percent, to 129,000 units.
The net income of the company, which recently went public, grew by 63.3 percent to R$25.9 million (€10.3m-$13.7m), as the gross margin improved by 2.1 percentage points to 41.8 percent and the operating margin before amortization (Ebitda) increased by 2.6 percentage points to 18.8 percent.
Sales in the domestic market jumped by 22.9 percent to R$226.9 million (€90.6m-$120.0m), with Arezzo growing by 17.3 percent and Schutz by 34.0 percent. Sales to multi-brand stores had the biggest increase, up by 42.1 percent, due in part to earlier deliveries. Instead, the group's revenues from exports, still represented mainly by the Schutz brand, declined by 13.8 percent to R$11.5 million (€4.6m-$6.1m).
During the latest quarter, the group opened 11 new points of sale including two corporate Arezzo stores, six Arezzo franchises, two Schutz corporate stores and one Schutz franchise. This brought the total door count to 311 units, 36 percent of them owned by the group and the others franchised, resulting in an expansion of 15.1 percent in the total selling area. Same-store sales grew by only 0.4 percent in the quarter, due to a drop in the customer flow and to weather conditions, but the franchised stores saw their sales rise by 11.6 percent on a comparable basis.
Schutz began to sell its products online in the quarter. It also launched a new store project in São Paulo that is meant to offer a superior shopping experience with its stronger emphasis on the products and on brand communication. The first franchised stores based on the same concept opened in Salvador de Bahia. Meanwhile, the Arezzo chain launched a new Arezzo Classic line of shoes whose inventories in the stores will be continuously replenished. The group also began to offer handbags and other accessories under its higher-end Alexandre Birman line.