Americans: understand in 10 texts the crisis of the retailer who only opened in Brazil because of the carnival

In May 1929, the American shops opened in Rio de Janeiro with an advertisement (as the advertisement was called) aimed at “chic ladies” from imported socks to fine china for a maximum price of two thousand réis. This week, when your request for judicial recovery has been accepted by justicethis amount would buy 346 shares of the retail chain, which left the Ibovespa, the main B3 index, valued at R $ 0.71.

Before the inauguration, during the Carnival of 1929, a ship flying the American flag docked in Rio de Janeiro with four Americans on board: John Lee, Glenn Matson, James Marshall and Batterson Boger. The group’s idea was to found a “pick up the goods and pay at the cashier” type retail store in Buenos Aires. But they changed their mind and stayed in Rio after enjoying the Carnival.

The innovation of the Americans was the “five and ten cents sotores” style (five and dime shops that were successful in early 20th century Europe and the United States) – ironically, the dealer’s bonds traded on the international priced market plunged to US$0.11 shortly after the judicial recovery request.

Americanas has 3,600 stores, about 50 million customers and generates about 100,000 direct and indirect jobs, according to the company. As of last year, the group had more than 140,000 individual investors on the stock exchange. When it opened, the attraction had thousands of items in a single store that had until then been found in bazaars throughout the city or sold by street vendors. This week, he had to get busy with the virtual shopkeepers to make payments when he realized that many were withdrawing products from online storefronts or double the prices so you don’t have to sell company items.

Below is a top 10 article to stay up to date on what led the nearly 94-year-old company to file for bankruptcy:

1. Rial finds BRL 20 billion “inconsistencies” in the company and resigns

On the 11th, Americanas informed that its president, Sérgio Rial, and the director of investor relations, André Covre, who had taken office ten days earlier, decided to resign after the company discovered inconsistencies in accounting records estimated at R $ 20 billion. (cclosed content)

Sergio Rial resigns as chairman of Lojas Americanas after finding BRL 20 billion ‘inconsistencies’ Photography: Paul Whitaker/Reuters

2. Suppliers charge Lemann and partners a fee to unlock new sales

The capitalization of the company, through a contribution of resources from the reference shareholders, Jorge Paulo Lemann, Marcel Herrmann Telles and Carlos Alberto Sicupira, has become the crucial point of the supplier vision to unblock the flow of new merchandise sales for the retailer. Some have even suspended business with the dealer. (cclosed content)

3. Banks harden for fear of losing at least R$7 billion with the risk of default

Fear of having to set aside at least R$ 7 billion in the balance sheet to cover the possible risk of insolvency of the retailer, the banks have closed the deal. According to financial market executives, Bradesque, Santander, Itau Unibanco, collected, BTG package And Bank of Brazil they are, in order, the entities with the largest volume of loans granted to the company. The amount that each bank has lent varies, but ranges from around R$5 billion, in the case of Bradesco, to R$1.3 billion, in that of BB. (cclosed content)

4. Did the executives know about the leak? Why didn’t the problem appear in the balance sheet?

Rial’s complaints about “accounting inconsistencies” in the retailer’s accounts have highlighted, in addition to the scandal, mistrust about the possible responsibilities of board members and executives linked to the company in recent years. But, after all, it was possible that executives and important American investors, such as Lemann, Telles and Sicupira – who lead the 3G Capital investment fund -, knew about the problem even before it was reported by Rial? (cclosed content)

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Jorge Paulo Lemann, one of the main partners of Americanas
Jorge Paulo Lemann, one of the main partners of Americanas

Photography: Dida Sampaio / Stadium

5. Americanas has paid council twice as much as Renner and Magalu over 10 years

The distribution chain stands out for remunerating its directors well, according to a survey based on the information provided by the company in the Reference Form, a document that listed companies deliver annually to the Securities and Exchange Commission (CVM), the market regulatory body. In the accumulated result for a decade, the Americanas board received, in nominal terms, without adjusting for inflation, R$505.4 million. The accumulated amount is almost double the amount paid to their directors by two peers between publicly traded companiesa Renner shops (252.8 million reais) and the Magalù (270.9 million reais). (cclosed content)

6. PwC can be held accountable and sanctioned by the CVM and other bodies

The gap has also raised questions about the role of accounting firm PwC, which is responsible for auditing the company’s financial statements. The case calls into question the work of the consultancy and auditing firm and raises questions about its possible liability. To analyze the accounting discrepancies found, the CVM has already launched two administrative proceedings. Experts in governance and commercial law interviewed by Stage say that the case must also be investigated by entities such as Federal Board of Auditors (FCA) and the Superintendence of Accounting and Auditing (SNC), to identify whether the audit service acted tacitly or collusively with the financial breach. (cclosed content)

7. Customers should stick with Mercado Livre, Amazon, Shopee and other giants

The absorption of the retailer’s clientele by the online giants Free market, Amazonia Brazil, Shopee And Louise magazine it’s already happening according to the perception of the industries supplying Americanas and other chains. According to a supplier who wished to remain anonymous, the move is the result of consumer choice, who doesn’t feel confident about buying from a company whose news reports say it is broke. (cclosed content)

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8. Was mega-investor Luiz Barsi right about retail?

The turnaround of Americanas recalls the words of Luiz Barsi, the largest individual investor on the stock exchange. “Retail companies, at least 40 have gone bankrupt. And the next ones will fail,” the mega-investor said last year. For some experts, yes. (copen content)

Luiz Barsi, the largest individual investor on the stock exchange
Luiz Barsi, the largest individual investor on the stock exchange Photography: Alex Silva / Stadium

9. American women have the fourth largest judicial payback in Brazil

Eight days after the case became public, the court granted the request judicial recovery Of Americans. The company claims it has R$43 billion in debt and said its cash was being drained by banks. The judicial reorganization of Americanas is the major fourth of the history of Brazil. (cclosed content)

10. Customers continue to buy unrelated to the crisis

The situation at Lojas Americanas has dominated the economic news of recent days: billionaire hole, resignations of executives and, Thursday 19, the request for judicial recovery. In stores, however, the company’s woes have done little to change the day-to-day. The Estadão report visited three stores this Thursday and saw little change from what was common before the turmoil involving the company. (cclosed content)

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