The big Brazilian e-tailer specializing in sports shoes and apparel has been losing money since it went public on the New York Stock Exchange two years ago at a price of $18 per share, consistently failing to meet its guidance. Netshoes' founder and chief executive, Marco Kumruian, and other major shareholders have agreed to sell their combined stake of 47.8 percent for $2 per share, or a total of $62 million, to Magazine Luiza, one of the biggest physical and online retailers in Brazil.

Netshoes has signed an agreement in principle for the sale of all its operations in Brazil to Magazine Luiza, subject to approval by two-thirds of the shareholders and regulatory approvals. It previously decided to stop trading in Mexico, and it has now decided to sell its operations in Argentina to another company owned by the BT8 group.

Known also as Magalu, Magazine Luiza started off in 1957 as a retailer specializing in home furnishings. It has since diversified into the sale of other types of products, including electronics and books. It has 950 stores, 12 distribution centers and a large internet platform that hosts numerous brands, generating sales of $220 million in the past year. The third generation of the founding family, led for the last three years by Frederico Trajano, has vowed to transform Brazilian retailing into a more efficient omni-channel experience, emphasizing the click-and-collect process to fend off Amazon.

In the past year, Magazine Luiza doubled its net profit to 597.4 million reais (€134.4m-$151.0m) on 31.9 percent higher sales of R$ 18.9 billion (€4.3bn-$4.8bn). Founded in 2000, Netshoes posted a record loss of R$ 332.4 million (€74.8m-$84.0m) on sales of R$ 1,808 million (€406.7m-$456.9m).

Magalu won in principle the contest for Netshoes' takeover against another big Brazilian retailer, B2W, that started with e-commerce, following Amazon's business model, and moved more recently into brick-and-mortar retailing. Netshoes sought to replicate Zappos' business model at the start, specializing in athletic footwear, and moved recently into casual shoes.