UPDATE 1-Brazil's GPA retailer to slash investments, could close stores

miércoles 9 de diciembre de 2015 14:39 GYT
 

* Capex 'just over 1 bln reais' may be lowest since 2009

* May shutter more Via Varejo stores early next year

* Ugly economy could spur M&A (Adds executive comments, details of investment plan)

By Brad Haynes

SAO PAULO, Dec 9 (Reuters) - GPA SA , Brazil's biggest retailer, plans to slash investments in 2016 to what may be the lowest level in seven years and could close more stores as the deepest economic recession in 25 years threatens to worsen in coming months.

Chief Executive Ronaldo Iabrudi told journalists on Wednesday that capital spending next year would fall to "a little more than 1 billion reais ($269 million)," down sharply from a projected 1.7 billion reais in 2015.

GPA's strategy confirms the fears of many economists that investments in Latin America's largest economy would tumble further next year as rising unemployment, accelerating inflation and a worsening political crisis batter business confidence.

The retailing giant's investments jumped from about 700 million reais in 2009 to around 1.2 billion reais in 2010-2012 and peaked near 1.9 billion reais in 2013 and 2014.

"The economy is bad and next year looks worse," Iabrudi said. "We're basing plans on the worst case scenario."   Continuación...