If Brazil’s economy had grown, if the pandemic had not occurred and if consumption had increased, the expansion plan drawn up by Toc & Stock management five years ago might have worked.
However, without these favorable conditions, debts mounted, eviction requests arrived, loans ran out and the retail crisis nearly brought down the furniture and decor chain founded by Ghislaine and Régis Dubruille in 1978.
The rescue took place in June, when its partners contributed R$100 million and managed to renegotiate R$350 million in bank loans. Two months later, Ghislaine returned to the position of President of Toc & Soc, a position she held until 2017. “Now, we want to bring the company back”, he said.
For them, Tok & Stok has in its DNA a physical store and its ready-to-wear sets, seasonal collections and partnerships with Brazilian and foreign designers.
Ecommerce operations, which have gained relevance in the retail sector and have been important in Tok & Stock’s strategy in recent years, account for about 15% of total sales on the network.
For Ghislaine, this level must be maintained. “We do not need to promote unprofitable sales and this way we will return to a more balanced outcome,” he says. In the executive’s opinion, it is difficult to make profits from digital sales, as they fall into product-by-product conflict. There are also costs for reverse logistics.
In the founding family’s vision for the business, larger physical stores are an integral part of what the company has called “a return to basics.” In addition to the different atmosphere established in the stores and offering decoration items in different styles (classic, basic, modern, etc.), the stores are staffed with new collections in line with fashion and design trends.
“This dynamism was forgotten in recent years because there was too much focus on digital. There, it is product for product’s sake. Now we are going to restore this charm of walking in space.”
For 2024, Tok & Stock plans to launch eight collections. Later this year, two will be launched: one campaign focusing on the garden theme, and the other on home tidying for Christmas and New Year celebrations.
Ghislaine says that while potential judicial or extrajudicial recovery is off the company’s agenda, he believes the accounts will soon be balanced. Today the situation is stable, but continuity of business depends on demand and interest. “We need consumption to increase our revenues,” he says.
At the end of June, when it announced its restructuring, Tok & Stock had 17 stores that were unprofitable and were closed. Most of these units (14) were studio models, a type of convenience store, measuring approximately 500 square metres.
Ghislaine says that this new type of action was part of an “ambitious and very aggressive development plan drawn up at the time”.
After leaving the presidency the executive remained on the board of directors of Tok & Stock. His successor managers were appointed by the majority, Carlyle Fund (which purchased 60% of the store chain in 2012).
“When a controller fund buys a majority stake, they give carte blanche to these CEOs, who are big names, with big results, and that’s important to whoever is running the business”, he says. “We had differences of opinion [com as decisões] And it was difficult to resist. The plan could have worked,” he says.
At present, the company does not plan to close any more stores. Of those who are working, the most volatile results have been recorded in Manaus, where logistics costs put pressure on results.
Tok&Stock’s budget for 2024 was finalized a few days ago. Ghislaine Dubrulle won’t talk about values, but says sales and margin estimates are conservative.
In furniture, most of the network’s suppliers are Brazilian, concentrated in the southern region of Brazil; Imported are about 17%. In accessories and decorative items, the slices are 50% each. The store has approximately 12 thousand products.
After a critical period, Ghislaine says that now the company wants to show that it is standing, that it is starting a collection and that it is not stopping. The public relations strategy includes events in stores and action with around 30 influencers who will deliver the message that Tok & Stock is still alive.