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With more candy and less cell phones, see what the ‘new American’ should be like

Retailer American, in judicial recovery since January, with declared debts of R$42.3 billion and losses of R$12.9 billion last year, needs to transform into a new business to continue operating.

The company’s restructuring included focusing more on categories that are consumers’ destinations – such as sweets, cleaning products and toys –, while selling higher value items, such as white goods, notebooks and smartphones, to online channel partner retailers (“vendors”). “) has been omitted. , says Leonardo Coelho, president of Americanas, who took charge of the company in February.

“We also want to strengthen the mix of home appliances with portable appliances like sandwich makers, air fryers, flat irons,” Coelho told the reporter.

“The idea is to return to the past, to the convenience and diverse store profile of Americans, the place where the consumer will find what they are looking for”, says Coelho, who took part in a conference call with Market this Thursday morning (16). Analysts will be required to present Americanas’s 2022 balance sheet, detail how the fraud was committed by former management and indicate the retailer’s next steps.

According to the executive, customers from America come daily to buy sweets and bomboniers. “We have high frequency of purchases and customer flow in stores. Our average ticket is low and does not represent a large portion of consumers’ budgets,” he says.

The company plans to generate cash only in 2025, when it intends to reach EBITDA (earnings before interest, taxes, depreciation and amortization) of more than R$1.5 billion. By then the company will have more expenses than revenues.

To achieve this, one of the main measures underway is to use artificial intelligence for pricing of commodities. “By the beginning of the year, all stores nationally adopted the same price for the same product,” says Coelho. “As a result, we saw distortions, such as an item being too cheap for the South and Southeast regions and too expensive for the North and Northeast, for example.”

Each of the company’s more than 1,700 stores in the country adopted its own modulation, i.e. a particular mix of products, according to its demand. “This greatly complicated the operation, and also increased our logistics costs significantly,” the executive says. Now, the retailer will separate its 1,759 American stores into five different profiles, each with a different mix of 10,000 to 14,000 items.

“This structure of products will follow certain variables, such as income, demographics and neighborhood,” says Coelho. “It will no longer be as seamless as it used to be,” the executive said, which requires delivering the right product at the right price for each store.

‘We’re not going to be free market competitors’

Another front in the restructuring will be the shift to online operations. According to the retailer, the company will no longer prioritize sales of its own stock (called ‘1P’ in internet jargon), but rather those of partner retailers, “vendors” (or ‘3P’).

“At least in the short term, we are not going to be a competitor to Mercado Livre”, says Coelho, highlighting that the impact of the crisis was greater on the digital operation, which affected both the number of visits and sales conversions. . “This also reduced the number of active sellers on our platform, as partners became skeptical about whether Americans would complete payments.” According to the executive, today Americanas has 150 thousand registered sellers, but only 50 thousand are active.
The company sought to reduce its own inventory online, where margins are lower, and increase participation from smaller sellers. Between January and October, 9,000 small online sellers joined the American marketplace, which receives commissions on sales.

“We expanded the possibility of weekly transfers for sellers. We also created ‘Americanas Vendas Mías,’ a program to define the best joint sales strategy,” he said.
Now, the idea is to work with the infinite shelf concept: if the consumer comes to the store and does not have the product, he can order it online from the supplier. Stores will also increasingly be used as pick-up points for products purchased through e-commerce. “Store managers were not encouraged to offer the point of sale as a delivery point for products purchased online, but now they are,” he says.

Another front of action in trying to get Americans back on their feet is the sale of advertising space to large suppliers, whether in physical stores or online. “We can offer everything from banners or special campaigns on the website to spaces in the store, such as internal media,” he says. Examples of this type of media in stores are large screens and security antenna covers (access controls at store entrances).

Fintech Ame is also part of the “New American” redesign. “Ame combines knowledge of income profiles with a loyalty programme, which is in the final stages of a redesign, to offer an intelligent cashback policy,” he said.

HortiFruti Natural da Terra and Uni.co (owner of the Imaginarium and Puket brands) continue to operate temporarily within the group, although the company intends to sell them. “But they will not be offered at clearance prices,” says Coelho.

In the view of the retailer’s chief executive, there remains much more synergy to be had within the American group. He says, “The fraud took up significant time for the old administration and necessitated the separation of areas into jagirs”. “Operations were subordinated to Excel spreadsheets to make imaginary profits. But now different areas of the company have begun to integrate,” says Coelho.

There is a possibility of firing and closure of another 100 shops in the third phase.

According to the executive, most of the company’s third-level managers – managers who reported to the directors who were ousted in February and subsequently fired – were also dismissed. “They didn’t necessarily participate in fraud,” he says. “But ultimately because they had a different business culture. Before they worked less and earned a lot as a result of fraud. Now we are going to work more and earn less.”

Despite highlighting the importance of physical stores in the “New American” strategy, Coelho does not rule out further store closures. Between January and November 5, 121 points of sale were closed. “While we are adjusting operations to a new reality, we will retain stores that make sense within the company’s strategy,” he says. However, for that to happen, Americans must have no less than 1,600 stores.

The executive believes in retaining the business, based specifically on two factors: the retailer’s ability to be present in all states and the federal district of the country, and “customer affection over its nearly 100-year history.”

“Research conducted in the first half of the year, the most severe phase of the crisis, showed that 76% of consumers associate brands with emotional memory,” says Coelho. “And more than 90% of those interviewed believe Americans should recover from this crisis.”

(Daniel Madureira/Folhapress)

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