Arezzo & Company, which owns the leading Brazilian shoe retail chain by the same name and the Schutz brand of women's shoes, reported a 43.3 percent in net income to 24.0 million reais (€10.5m-$15.1m) on 21.5 percent higher revenues of R$152.2 million (€66.3m-$95.7m) for the second quarter ended June 30.

Part of the growth was due to a 9 percent increase in the number of stores to a total of 300 compared with the same period a year ago. The number of company-owned stores rose by 24 percent to 31, and their sales grew by 19.2 percent on a same-store basis. The number of franchised stores increased by 8.5 percent to 269, and the group's sell-in into those stores went up by 24.2 percent on a comparable store basis.

Some growth came also from the launch of a more affordable line of shoes, Anacapri. Sales grew by 27.6 percent to R$125.9 million (€54.9m-$79.1m) for the Arezzo chain, representing 68.4 percent of domestic sales. Schutz generated sales of R$50.4 million (€22.0m-$31.7m) in Brazil alone, up by 12.5 percent compared with the year-ago period. Schutz also has a presence in foreign markets, but the company's total sales abroad fell by 15.9 percent to R$9.9 million (€4.3m-$6.2m).

The gross margin improved by 0.4 percentage points to 43.2 percent, thanks to a larger proportion of company-owned stores. The operating margin before amortization (Ebitda) rose to 18.6 percent from 18.4 percent. The net profit margin improved to 15.8 percent from 13.4 percent.

The next big project will be the launch of a retail franchising operation for Schutz, based on a new store concept. For the moment all except one of the 10 Schutz stores in operation are directly operated by the group. Arezzo has 11 own stores and 247 franchises. The group also owns four Anacapri store and a small store for its high-end Alexandre Birman line of shoes.

All in all, the company plans to add 20 more corporate or franchised stores to its network in the second half of this year. It will then gradually take the Arezzo franchise to smaller towns within Brazil. The whole store network will benefit from the introduction in the last few days of a new inventory management system intended to keep track of the need to replenish specific shoe styles and sizes for each store, whether it is a DOS or a franchise.