Riachuelo invests in digital channels and reaches 100% of the receipts target

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The Guararapes Group, owner of Riachuelo, adopted a series of measures to keep its operation healthy in the first quarter of the year. With its 323 physical stores across the country and factory closed during the crisis, the company directed its efforts to guide customers accustomed to paying their invoices in store (more than half of the receipt base) to adopt digital media, also reinforcing the partnership with banking correspondents, such as supermarkets and pharmacies, to offer new forms of payment to customers.

Credits: Disclosure

The result was the fulfillment of 100% of the receipt target in April and the recovery of the gap regarding unpaid card bills in March. “As soon as we made the decision to close the stores, we knew that the main variable to be impacted would be the receipts portfolio. Our client is more sensitive to any macroeconomic movement,” said Riachuelo CEO Oswaldo Nunes in a conference call with analysts this Friday. fair (22). “We were very quick and mobilized the entire sales front to teach our client how to use the digital medium”.

Riachuelo managed to make its portfolios perform at the level of generating cash in the quarter, in addition to seeking in the market other ways to preserve its liquidity, maintaining a healthy cash position to go through the most acute moment of the crisis without impacting its sales force. “We use all the necessary instruments to preserve the company’s cash and maintain our jobs. Giving up qualified and committed labor is always our last option”, reinforced Nunes.

Riachuelo accessed credit lines with the banks and announced in a relevant fact the raising of R $ 1 billion in the period, of which R $ 200 million was raised in the first quarter of this year and the remainder in April. “In the stress scenarios we drew up at the beginning of the crisis, we were careful to trigger credit lines and significantly increase our cash position,” said Túlio Queiroz, CFO at Riachuelo.

The company ended the first quarter of 2020 with net debt of R $ 1.582 million compared to R $ 1.613 million reported in the first quarter of 2019. The increase in the company’s leverage, to 1.6 times over Ebitda (against 1.0 times in the same period of 2019) was due to the pressure suffered in the indicator in the first quarter of this year, due to the scenario of a drop in sales revenue and maintenance of the level of operating expenses, whose efficiency efforts will have effects from the second quarter onwards.

The ‘new normal’

In Oswaldo Nunes’ view, the potential of the physical store continues, with the customer wanting to integrate more and more to enjoy a better experience, and sees consumers gradually returning to a ‘new normal’ post-isolation. But digitalization, according to him, should be strengthened after the crisis and weigh more on the consumption decision.

“We see a more digital and more demanding consumer with the brands. Companies like Riachuelo, more robust and with more access to credit, are managing to get through the crisis to continue advancing in the digital transformation with speed, and also in the relationship with the customer, to get out of it stronger. We need to reframe the role of the store and reinvent the way of interacting with the customer at the point of sale. It is a blank paper, an opportunity to redesign the post-pandemic business “.

In 2019 alone, the company invested R $ 168 million in technology aimed at digital channels and, with the crisis, many projects were anticipated, with the vision of having the customer at the center of the business. WhatsApp sales are enabled for 100% of physical stores and available in all markets operated by the company, and Click & Collect, also available in all chains, allows customers to withdraw products purchased online in physical stores. The company also implemented Drive-thru in 156 stores to face the crisis period and the RCHLOVERS project, which started in April, which made Riachuelo employees new sales promoters.

Other measures reinforce Riachuelo’s integrated operation in online and offline channels and the more fluid store experience. The Ship from Store has been completed and will be implemented in June and, as a result, all of the company’s inventories (store distribution centers) will be available for online sales. The Mobile POS, already present in 295 units, which allows agility in the closing of purchases and consequently greater conversion in the store environment will be available in 100% of the units at the reopening. Self Check-out, a self-payment modality, will be tested later this year.



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