April 24, 2020 / 6:56 PM / a month ago

UPDATE 1-Brazil's Via Varejo reopens stores, sees sales rebound after coronavirus

(Adds details, context and share performance)

By Gabriela Mello

SAO PAULO, April 24 (Reuters) - Brazilian home appliance and electronics retailer Via Varejo SA has reopened 170 of its more than 1,000 brick-and-mortar stores closed by coronavirus-related lockdowns, and sales have recovered after revenue fell by as much as 70%, executives said.

“It’s still a small sample, but we see sales performing like in pre-COVID-19 times,” Chief Executive Officer Roberto Fulcherberguer said in a live-streaming presentation on Friday with research firm Eleven Financial.

The company has also boosted e-commerce over the past weeks after assigning some store employees to help customers with online purchases via Whatsapp amid the pandemic, a tool that now represents 20% of all online sales.

“We had over 20,000 employees at home, so we came up with this solution, which is now used by 7,000 employees and we see potential to get to 10,000,” the executive said.

Via Varejo expects to reopen most of its stores throughout May, Fulcherberguer said.

On April 15, Reuters reported the company was seeking to suspend rent payments for over 1,000 stores while postponing some payments to indirect suppliers to preserve cash amid the pandemic.

The company’s chief financial officer, Orivaldo Padilha, said the retailer has managed to get some rental exemptions from some landlords, while others agreed to discounts of between 60% and 80%.

On inventories, Via Varejo has around 5 billion reais in products and is working to replenish stocks as necessary, Fulcherberguer said, saying this is helping the company gain market share from brick-and-mortar chains as well as online retailers.

“We see some purely online competitors lacking some items in stock and we were even invited to become a seller in their marketplace, which makes no sense at all for us,” he said, without naming players.

Fulcherberguer said there is no pressure in terms of cash for the moment, though he suggested that Via Varejo may consider a capitalization if there is a window of opportunity in the future.

He said the company’s 2020 expansion plan is still attainable as the coronavirus crisis forced it to accelerate most of the digitalization efforts.

“We’ll soon introduce changes in our marketplace and app and, even if the retail market shrinks after the crisis, our slice of the cake is likely to get bigger,” Fulcherberguer said.

Via Varejo shares were down more than 11% on Friday at 6.52 reais, reducing gains so far in April to 23%. (Reporting by Gabriela Mello; Editing by Leslie Adler)

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