updated on Jan/2010

DEVELOPMENT OF LUXURY RETAIL - PROFILE 2008

RETAIL SECTOR

 

In consultation with 295 companies in the luxury sector, the finding is that, despite the crisis, it is expected the market to grow 8% in 2009 to $ 6.45 billion - down from 17% in 2007 and 12 5% in 2008.

According to the study, 46% of companies have decided to revise downwards the earnings estimate for 2009, 32% kept their expectations and only 22% think they will do better in 2009. The survey also shows that when it comes to luxury, the first national brand that comes to mind 22% of consumers is Daslu (although only 8% to define as "desired"), followed by H. Stern (14%), Forum, Victor Hugo, Osklen (all 4%) and Fasano (3%).

These companies are among the fashion, cars, jewelry, perfumes, cosmetics, hospitality, food and drink;   earned together $ 5.99 billion in 2008, paid an average salary of R $ 2,667 to their employees, and customers who have spent at each visit to a store, an average of R $ 3,454.

Source: Survey "The Luxury Market in Brazil"   MCF GFK Consulting and Brazil.

THE PLAYERS OF LUXURY RETAIL OF SÃO PAULO

In Sao Paulo, which concentrates 70% of Brazilian luxury sector, retail has four major competitors: traditional Iguatemi and Rua Oscar Freire - the newest, Garden City Mall, opened in 2008 - and   Daslu, turned traditional new (Villa Daslu), left the quiet neighborhood of Vila Nova Conceição and others appeared - in the press and its new store in Vila Olimpia, and goes through successive crises and scandals tax since then. Also opened a store in Garden City Shopping.

The existence of these four churches is a demonstration of the growing sector of luxury in the country, but although the growth potential is enormous, the dispute between them promises to be fierce.   The shopping Iguatemi Jereissati family, since attempts to curb the brands that are on your shopping from opening branches in Garden City.

The Iguatemi is the oldest mall in Brazil, appeared in 1966, since then passes continuously for expansion and modernization, including its strengths are the location, at Av Faria Lima, and the marks   Tiffany & Co., Louis Vuitton, Salvatore Ferragamo, Ermenegildo Zegna and Dolce & Gabbana. Among the limitations of the Iguatemi are structural in nature - can not hold further major expansions, to receive new brands, while living with department stores with popular profile, as American and C & A.

The Garden City was planned to be a temple of luxury, and still has the strategy to be a residential shopping together. The complete project includes a complex of three office towers and nine residential, with apartments priced between $ 2 million and $ 4 million each.  

The dispute between the luxury retail now extends to the territory of the shares. JHSF shares on the stock exchange were the only sector to record high construction prices in 2008: 13.5%, compared to an average drop of 40% recorded in the sector. The group Iguatemi, moreover, is in the opposite case. The company's shares fell 33% in the last eight months, one of the worst performances among the managers of shopping centers in the country. Comparing the results in the last quarter (net income fell 29% over the same period last year), the roles of Iguatemi reflect the uncertainty that has formed around his latest venture: JK the mall, shopping center located the Marginal Pinheiros, in Sao Paulo, on the ground adjacent to Daslu opulent headquarters in the neighborhood of Vila Olimpia and only 2 km's own Iguatemi. Conceived as a response to Garden City, the project foresees the construction of a high standard in a shopping complex consisting of two office towers of approximately 30 floors each. However, after over a year since announcing the project, the group has not closed the Iguatemi portfolio of stores in the new mall. Many brands present in Garden City, and even in the Daslu Iguatemi were afraid to open another store in regions so close and thereby undermine the profitability of existing points.

Source: Examination, 2008.