Brazilian online home decor retailer Westwing seeks buyer: Valor Econômico

While Westwing looks for a partner, another Brazilian newly listed home decor e-commerce platform, Mobly, had its shares plunged on Tuesday at a historic low

Photo: Screenshot Westwing website

Brazilian home decor e-commerce platform Westwing is looking for a buyer for its operations, newspaper Valor Economico reported on Wednesday.

The retailer listed its shares on the Sao Paulo stock exchange B3 in February, when it priced its shares at BRL 13 ($2.51) each. On Tuesday, shares closed at BRL 9.89, with a market capitalization of RL 1.08 billion.

In a statement, Westwing said it is constantly monitoring potential deal opportunities, but that it did not have any concrete agreement to announce.

Home decor e-commerce platform Mobly shares plunged

Meanwhile, another Brazilian home decor e-commerce newly listed, Mobly, saw its shares plunging 8% on Tuesday, renewing historic low, after a loss of BRL 17 million in the second quarter, well above the loss of 7.6 million had by the online platform for the sale of furniture a year earlier.

Net operating revenue grew 38.6% year on year to BRL 175.7 million reais, but GMV was almost stable, up 0.4% to BRL 247.4 million, according to data released on Monday after the market close.

READ ALSO: Brazil’s retailer Mobly achieves GMV 50% higher in Q1 2021 compared to last year

Adjusted Ebitda was negative BRL 6 million, from positive results of BRL 1.9 million reais a year earlier, with an adjusted Ebitda margin negative 3.4%, from the positive margin of 1.5% in Q2 2020.

Around 2:50 pm on Tuesday, shares fell 8.04% to BRL 13.04, having reached BRL 12.95 at the session minimum, the lowest price since its initial public offering (IPO) in February. Since then, it has fallen about 40%.

“The results are disappointing, given that we had higher expectations at the time of the IPO,” Bradesco BBI analysts led by Richard Cathcart said in a report, in which they cut their price target from BRL 30 to BRL 26.

“We believe Mobly is experiencing short-term headwinds, such as weak demand with the reopening of physical retail and pressure on margins due to raw material cost inflation,” they wrote, assessing that both problems should diminish at some point, but that the next quarter is unlikely to bring better news.

READ ALSO: Brazil’s retailer Mobly makes its IPO on Brazil’s B3

Still, they reiterated their ‘outperform’ recommendation for the papers. “We remain optimistic about Mobly’s long-term growth prospects, driven by its strategy in private label, logistics, and the structural trends of channel shift and consolidation.”

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