Business

Brazilian retailer Magazine Luiza saw 49% jump in sales boosted by e-commerce

Sales on the internet more than compensated for the drop in physical stores and the company's revenues surpassed that of Via Varejo

the brand of a brazilian store called magazine luiza
Photo: Screenshot
  • The share of e-commerce in total sales rose from 41.5% to 78.5% year on year;
  • Magazine Luiza plans to hire around 2,500 people by September, focusing on services and logistics.

Brazilian retailer Magazine Luiza saw a jump in sales in the second quarter, as its e-commerce sales more than compensated for the drop in sales of physical stores, closed since mid-March due to social isolation measures to contain the pandemic of the Covid-19.

The company reported on Monday that its total sales from April to June totaled BRL 8.6 billion reais, a 49% increase over the same period in 2019, surpassing rival Via Varejo, owner of Casas Bahia and Ponto Frio, with BRL 7.26 billion in the quarter, according to Reuters.

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Reflecting the boom in web commerce in the period, Magazine Luiza saw its sales jump 182% in total e-commerce, while its street stores and shopping centers sold 45% less. Thus, the share of e-commerce in total sales rose from 41.5% to 78.5% in the annual comparison.

“Considering the circumstances, it was an epic result,” said the company’s CEO Frederico Trajano.

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According to Trajano, 92% of Magazine Luiza’s 1,100 physical stores are currently operating. The company also said that in July its total sales grew 82% year on year, while e-commerce increased 162% and sales in physical stores grew 10%.

With these indicators, Trajano said that the company has positive prospects for the second half of the year, planning to hire around 2,500 people by September, focusing on the areas of service and logistics.

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The CEO admitted that the result was positively affected by government financial support measures, mainly the monthly emergency aid of BRL 600 to low-income families and argued that the program should be maintained for a longer time. “The‘ coronavoucher ’effect has helped to significantly cushion the effects of the recession and I think it is not yet time to back down on countercyclical measures,” Trajano told Reuters.