Investor Relations

Company Overview

Company Profile

For over 70 years on the market, Guararapes has been one of the largest fashion groups in Brazil, with operations that currently encompass the following: Company Profile

  • The retail chain of Riachuelo, Casa Riachuelo and Carter’s stores, with e-commerce and 373 brick-and-mortar locations scattered across Brazil.
  • Midway Financeira, an integrated platform for financial products and services.
  • Two factories for clothing and fabrics in general, located in Natal-RN and Fortaleza-CE.
  • Midway Mall, in Natal-RN.
  • Three Distribution Centers (DCs), located in Guarulhos-SP, Natal-RN and Manaus-AM.
  • Transportadora Casa Verde

The Company integrates retail, industrial and financial operations, which provides gains in efficiency and agility to its operations, ranging from product development to delivery to the final consumer. Its stores, offices, factories and DCs gather around 40,000 employees, focused on democratizing fashion in Brazil and united by the purpose of connecting wishes to accomplishments.

In more than seven decades, the Company has witnessed major changes in Brazil and around the world, from the emergence of ready-to-wear stores to the revolutions generated by the internet and social media. Walking hand-in-hand with Brazilians throughout its history, the Company knows that it is essential to understand the customer’s journey, their needs, and their preferences.

For the design of its products, the Company integrates its experience in the industry by studying and analyzing trends, models, prints, colors and materials, seeking consistency and assertiveness in the product launches that occur throughout the year, offering a variety of options to meet to the different lifestyles and usage occasions of its consumers.

In the last few years, the Company has been developing and building an ecosystem comprising fashion, lifestyle and financial services, a move that takes place together with the Company’s digital transformation process.

Guararapes increasingly perceives customers concerned with what they are consuming: the origin of the products, the conditions whereby the garments were manufactured, the destination of waste. Accordingly, it revisited the issue of ESG (environmental, social and corporate governance) within the Company, and outlined a strategy mainly related to material themes that permeate its value chain, as presented in its Sustainability Report.

On the Governance side, it took an important step forward with the migration of the Company to the special listing segment of B3 S.A. – Brasil, Bolsa, Balcão (Brazil’s main stock exchange), called “Novo Mercado”, a milestone for Guararapes, which reinforces its commitment to high standards of corporate governance.

 

Lojas Riachuelo

Riachuelo, a company in the retail sector, was acquired in April 1979 with the aim of promoting integration between retail and production.

Riachuelo proposes to facilitate access to fashion, taking it to the consumer in a streamlined and high-quality way, at a fair price. To this end, it researches, develops and distributes the latest items from the fashion runways and the streets, with the speed that the world asks for and that customers deserve. Furthermore, it seeks to bring quality products with personality, to be a benchmark in women’s, men’s and children’s fashion retail.

Currently, 100% of the production at the Guararapes factory is destined for Riachuelo stores. This process began to be developed with greater intensity starting from 2005; however, it was only in 2008 that production began to be fully directed to the Group’s chain of stores, which is present nationwide.

With the strength of the Carter’s brand, Riachuelo reinforced its positioning in the infant and toddler clothing segment, a market that is currently served by small chains with only regional significance in Brazil. Carter’s has strong synergy with Riachuelo’s value proposition since both offer quality products at an excellent cost-benefit ratio. Having the brand’s exclusivity in Brazil makes this partnership an important anchor for the Company’s digital channels platform, by creating an environment that involves all categories related to motherhood, which is even more complete with the entry of the marketplace, offering clothes, layettes, Fast Moving Consumer Goods (FMCG), light and heavy children’s lines, among other products and services that expand customer relationships and purchasing frequency.

All Carter’s stores were born omnichannel and integrated with the Company’s ecosystem. By late 2021, the Company had Carter’s stores in all regions of Brazil and a dedicated brand website for the domestic market.

Casa Riachuelo offers a differentiated shopping experience, with items that bring the latest trends from different lifestyles to dress Brazilian homes, with a focus on serving a segment of the public that is still hardly explored. With Casa Riachuelo, the Company offers customers the right mix of products, competitive prices, financial services, and gift registries, all in an omnichannel experience. Casa Riachuelo closed out 2021 with three stores in the “phygital” format, where it displays products from marketplace sellers at brick-and-mortar addresses and sales are carried out using the E-store/Infinite Shelf solution. As of late 2021, Casa Riachuelo stores were present in all regions of Brazil.

 

Midway Mall and Properties

With its grand opening on April 27, 2005, Midway Mall has 231,000 square meters (m²) in total floor area, consisting of three stories occupied by anchor stores, satellite stores, a food court, various services, and seven movie screens (Cinemark brand), in addition to a complete gourmet space consisting of many of the city’s most renowned restaurants.

Teatro Riachuelo is located on the third floor of the Mall, a modern and complete Christmas show house. Opened in December 2010, the space can hold up to 3,500 spectators, depending on its set-up.

The Mall offers a broad mix of leisure, entertainment and culture, providing the public with a wide range of shows and performances, thanks to specialized administration in partnership with event operators that have extensive experience in the segment.

In addition to the Midway Shopping’s operation, the group also stands out for having a representative portfolio of stores at company-owned properties. In March 2022, 48 Company’s stores were installed at properties belonging to the group, representing 18% of the total sales area. Considering the area of company-owned properties, together with the Natal distribution center and industrial production plants, the Company has roughly 590,000 m² of gross constructed area.

 

Transportadora Casa Verde

Transportadora Casa Verde, a road transport company, is responsible for part of the Group’s logistics. Due to investments made in recent years, mainly in technology, it has been able to efficiently deliver the products manufactured by the Company to Riachuelo stores nationwide.

 

History

Guararapes Group, today recognized as one of the Best Companies in the Textile Sector in the Industry Category by Exame Magazine, as well as one of the brands that employs the largest number of people in Brazil, began its legacy in 1947, when the brothers Nevaldo and Newton Rocha opened their first fabric store, called “A Capital”, in Natal-RN.

After four years in operation, the first business of the Rocha brothers expanded to Recife-PE, with the implementation of a fabric manufacturing company, as well as the acquisition of several commercial locations.

In October 1956, the Company was founded in Recife-PE. After two years, the first factory was inaugurated in Natal-RN, with a total floor area of 2,700 m², consequently transferring its head offices to the same location.

In the early 1970s, the Company went public, with the subsequent construction of the factories in Fortaleza-CE in 1976 (9,800 m² of gross floor area), and in Mossoró-RN, as well as the creation of the chain of “Super G” stores.

In 1979, Guararapes acquired Lojas Riachuelo and Wolens, expanding its operations to textile retail, an area responsible for the Company’s greatest growth in recent years.

Also in 1979, Guararapes Têxtil was opened in Natal-RN, with 40,000 m² in gross floor area. In 1982, the Pool brand was launched, conceived by Flávio Rocha, which became a fashion icon in the 1980s, in addition to being the main sponsor of race driver Ayrton Senna at the start of his career, when he competed in Karting and Formula 3.

Later, in 1983, the Seta and Wolens stores were taken over by Riachuelo. Ten years after that (in 1993), Grupo Guararapes underwent a process of modernization and restructuring.

In 1997, the manufacturing unit in Natal-RN (responsible for the production of knitwear and part of shirt-making operation), was transferred and expanded to the industrial district of Extremoz-RN, today with a total floor area of 150,000 m². Parallel to this, the factory in Fortaleza-CE became responsible for the production of flat fabrics, including twill and denim, as well as shirt making. The products manufactured by Guararapes play a fundamental role vis-à-vis challenges in the supply chain, ensuring agility and an appropriate product mix for Riachuelo.

In addition to existing enterprises, the Company also invests in research, creation, development, and distribution process to develop its integrated model, seeking efficiency between product development and delivery to the stores. To do so, it has three Distribution Centers (“DCs”): one in Extremoz-RN (opened in the 2000s, with 58,000 m²); one in Guarulhos-SP (opened in 2016, with 100,000 m²), and another one in Manaus-AM (with 6,000 m²). The DCs in Extremoz and Guarulhos have integrated inventories and operations for both physical and online channels. Additionally, the DC in São Paulo is 100% automated for manufacturing, with SKU control per piece.

In 2005, the Company opened the Midway Mall in Natal-RN, and in 2008 it began operations at Midway Financeira. Also in 2010, it kicked off operations with the Bandeira Card and opened the Teatro Riachuelo in Natal-RN.

Crossing borders, in 2013 the Company opened an office in the city of Shanghai, China, to intermediate commercial negotiations.

In 2015, the Company began investing in a new Distribution Center to enable the migration of 100% of the mix to the SKU replacement model, fundamental for the development of “fast fashion” concepts, which was inaugurated in 2016. The greater investment in 2015 and 2016 increasingly enabled the Company to take advantage of being an integrated company. Also in 2015, the Company began to carry out mobile phone operations and, in 2016, it began its Perfumery operations.

With a view to further business expansion, in 2020 the Company opened two new store formats: Casa Riachuelo and Carter’s. With Casa Riachuelo, the Company offers customers items that bring the latest trends in different lifestyles to dress Brazilian homes. Parallel to this, by acquiring the exclusivity of the Carter’s brand in Brazil, the Company has reinforced its positioning in the infant/toddler clothing segment, expanding its relationship with customers.

In recent years, the Company has been developing and building a fashion and lifestyle ecosystem in conjunction with the digital transformation process. This digital transformation process has gone through four major cycles: First, the Company refurbished and updated its environments and systems to strengthen the technological base that will support its next steps. Then, it redesigned the technological architecture, under the gaze of its strategy, ambition, and integrated systemic vision.

In 2021, it ended the third cycle, with the consolidation of pillars and levers capable of bringing opportunities for generating revenue. Now, the Company enters the fourth cycle, which focuses on creating value and integrating technological solutions, essential in this increasingly multichannel universe, with numerous forms of interaction, always considering the customer at the center of decisions.

To offer the best shopping experience to customers, the Company seeks to adapt to technological innovations, relying on integrated solutions, e.g., e-store (infinite shelf), customer service via WhatsApp, self-checkout, personalization, affiliate network, gift registries, in-store mobile POS, among others.

Such tools are supported by omnichannel solutions with great logistical efficiency, such as In-Store Pick-Up and Quick Pick-Up, Ship from Store, Express Delivery, Hub Stores, and strategically located distribution centers with inventories and operations integrated with the phygital (physical + digital) world.

Also in 2021, it opened Loja do Amanhã, in Jacarepaguá-RJ, a more sustainable point-of-sale model. In the same year, the request for migration to the Novo Mercado segment was granted by B3 S.A. – Brasil, Bolsa, Balcão (Brazil’s main stock exchange).

Since its founding, the Company has sought to direct all its efforts toward achieving maximum integration between its operations, a fact that allows the Company to be the only player to integrate the three aspects of its business: retail, industry, and finance. In addition to Riachuelo and Midway Financeira, the Group owns the Midway Mall and Transportadora Casa Verde.

Timeline

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