(Corrects first paragraph, headline to online sales, not total sales to reflect Via Varejo’s corrected figures)
SAO PAULO, Dec 17 (Reuters) - Brazilian electronics and appliances retailer Via Varejo SA sees online sales rising more than 30% in 2020 as it boosts capital spending and revamps operations to transform itself from a money-losing business into a leading player in the sector.
“The company should improve its performance quarter after quarter next year... Our mission is to achieve the biggest turnaround yet seen in Brazilian retail,” Chief Executive Roberto Fulchenberguer said in Via Varejo’s first meeting with investors and analysts since a management reshuffle.
His remarks come six months after retail veteran Michael Klein and his family gained control of Via Varejo from GPA SA , which is a subsidiary of France’s Casino Guichard Perrachon SA.
Since June, Via Varejo has replaced managers and started an overhaul of its business practices, including an internal probe that so far has found evidence of accounting fraud between the first quarter of 2018 and the second quarter of 2019.
“In this business there is no such thing as scoring a goal with the hand... It’s as simple as buying and selling properly,” Chief Financial Officer Orivaldo Padilha said.
The company expects to conclude the third phase of the probe in February.
For now, it estimates a cash burn of 900 million reais related to provisions over the next three to four years. In the fourth quarter alone, Via Varejo sees an impact of up to 1.4 billion reais on its “bottom line” stemming from irregularities.
Asked if the company plans to sue former controller GPA in connection with the probe, Padilha said there is not enough information to determine appropriate judicial measures. “So far all individuals involved in the accounting fraud were mid-level executives of Via Varejo, but the investigation is still ongoing,” he said.
Shares in Via Varejo have jumped almost 56% since November 13, when the company announced the start of the probe.
Via Varejo aims to boost capital expenditure to 700-800 million reais next year, compared with 322 million reais in the first nine months of 2019, executives said.
Besides opening up to 90 new brick-and-mortar stores, mostly in the north and northeastern regions, the company plans to renovate 100 of its existing 1,071 stores, said Chief Operating Officer Abel Ornelas.
Via Varejo is also considering divesting non-core assets, according to Padilha. Fulchenberguer added, however, that the company is not considering the sale of online retail platform Extra.com. “It doesn’t make sense to us,” he said. (Reporting by Gabriela Mello; Editing by Louise Heavens and Dan Grebler)
Our Standards: The Thomson Reuters Trust Principles.