After a “positioning error”, Marisa (AMAR3) now focuses entirely on popular fashion

Executives from Lojas Marisa (AMAR3) defended, during the earnings call for the fourth quarter of 2023 held this Tuesday afternoon (23), that the company will return, this year, to focusing on popular fashion.

The change in positioning justifies, according to the directors, the recent arrival of Edson Garcia as CEO of the retailer (the fifth executive to hold the position in two years). The new executive director has experience at Caedu and Riachuelo.

Andrea Menezes, member of the board and who temporarily held the position of CEO of Marisa, explains that the decision for changes came after the fourth quarter of 2023 frustrated the company’s expectations. Marisa is undergoing a restructuring process, which closed 97 units throughout 2023.

“What hurt us most was that the fourth quarter was weaker than expected for such an important period for retail. We were happy with our turnaround, but we didn’t achieve what was expected”, says the executive.

After the frustrating numbers, the team looked into the possible causes and came to the conclusion that Marisa’s stores had the wrong brand positioning.

“We put aside the explanation for the lack of inventory replenishment and analyzed the core of our business. Some of the stores that we discontinued, the points, were taken over by competitors in the same sector and did well”, says Menezes. “We then realized that we had a sales position more focused on the popular, but with a brand position more for the middle class. Let’s turn the business completely back to the popular class.”

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Garcia argues that the diagnosis was accurate. Marisa, according to him, had a brand positioning fixed in classes C1 and C2, with the look reaching class B, while the majority of the retailer’s customers – 75% – were in C2, D and E. “

Executives mentioned that pilots have already been made. According to them, a store in Santana, a neighborhood in São Paulo, recorded an increase in sales after the changes, with its share of the company’s total gross revenue jumping from 0.73% to 0.85%. The Jabaquara unit, also in São Paulo, had its share jumping from 0.18% to 0.23%.

In changes, the layout of stores, for example, will stop having so many mannequins and will now have “promotional tables”, a feature of more popular brands. The products are also becoming more popular and the windows have more offers. There is also a new price positioning. “We will be better positioned, in terms of price, close to popular stores, but we will not leave fashion aside”, says the new CEO.

Finally, the executives mentioned that Marisa currently has a comfortable cash position for changes and to honor its future financial commitments.

Regarding the reservations regarding projections for contingencies made by the EY audit, the directors mentioned that they had other legal opinions and that they are comfortable with the matter. “The auditor is of the view that in accounting terms it is a matter to be provisioned, but we are comfortable because legally the position is that the loss is possible, not probable”, explained the CFO, Roberta Leal.

The consultancy pointed out in its analysis of the financial statements that there was an overstatement of R$154.7 million in the total investment balance of non-current assets and equity, while the loss was understated by R$17.8 million. She also noted that the company MServiços faces lawsuits over omission of taxable income from previous years that were not adequately provisioned.