July 25, 2018 / 7:50 PM / 5 months ago

UPDATE 1-Brazil's GPA eyes aggressive expansion, new initiatives for rest of 2018

(Adds information throughout on initiatives at various GPA banners)

By Gabriela Mello

SAO PAULO, July 25 (Reuters) - GPA, one of Brazil’s largest food retailers, will open 13 stores under its recently re-launched Compre Bem brand by the end of August and speed up an expansion of its wholesale-style Assai banner in the second half of 2018, executives said on Wednesday.

Compre Bem, a food retail chain that emphasizes regional flair to compete with smaller market incumbents, was purchased in 2003 but discontinued in 2011. With the relaunch, GPA, owned by France’s Casino Guichard Perrachon SA, will be seeking to penetrate various parts of the country with well-positioned regional rivals.

The moves underscore how GPA is eager to expand as the food retail sector picks up steam. It also illustrates how Chief Executive Peter Estermann and his team, installed in April, are quickly making their mark on the food retailer, the second largest in Brazil after Carrefour’s local unit .

“We’re going to evaluate a pilot of 13 Compre Bem stores, and in the first quarter of next year we’ll have some more consistent information,” Estermann told analysts in a call following the company’s second quarter results release.

GPA also plans to renovate 10 stores under its traditional Extra banner by the end of August and has picked out another 32 stores to modify to appeal to a more upscale audience.

The company is currently building or converting stores under other GPA banners into 14 new Assai stores that will total 70,000 square meters in retail area when completed, the executives said.

VIA VAREJO STILL FOR SALE

On the call, GPA Co-Vice Chairman Ronaldo Iabrudi said the recent migration of electronics retailer Via Varejo SA to the Novo Mercado segment of Brazil’s main stock exchange will help GPA sell the unit.

Iabrudi added that GPA itself was not considering moving to the Novo Mercado, which has higher corporate governance standards than the rest of the exchange and demands that companies have only common shares.

GPA first put Via Varejo up for sale in 2016, but the company’s traditional brick-and-mortar formats have attracted only sporadic interest. In an interview with Reuters this week, Iabrudi said putting the firm on the Novo Mercado should make its shares more liquid. (Reporting by Gabriela Mello; Writing by Gram Slattery; Editing by Steve Orlofsky)

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