Brazil's CBD Seeks To Sell Nonfood Business
November 24 2016 - 6:00AM
Dow Jones News
By Rogerio Jelmayer
SAO PAULO--Companhia Brasileira de Distribuicao (CBD, PCAR4.BR),
one of Brazil's largest retailers by revenue, said its board
approved the sales process of its nonfood division.
The company, which is controlled by French retail group Casino
Guichard-Perrachon SA (CGUSY, CO.FR), said in a statement that it
is in line with its strategy to concentrate on its food
division.
Earlier this month, CBD had said that it was evaluating
strategic alternatives for its nonfood division.
"At this stage it is impossible to affirm that a transaction
will effectively close, as it depends on multiple scenarios and a
de-facto willing buyer," Credit Suisse equity analysts team wrote
in a research report.
"We believe, however, that the outlook for PCAR4 is ultimately
positive as the company is working to streamline its corporate
structure; might raise some important cash and, we are of the
opinion that Casino will be very careful in crafting a solution
that ultimately benefits all shareholders, which if confirmed would
help in dissipating outstanding corporate governance risks," it
added.
CBD plans to focus on its food business, which reported a 14%
increase in sales in the latest quarter. Sales at the company's
nonfood businesses, such as home appliances and electronic goods,
dropped 10% during the period, while overall net revenue rose 4.4%
to 15.09 billion reals ($4.45 billion).
The company's nonfood division is called Via Varejo and operates
under brand names Casas Bahia and Pontofrio.
Brazil's poor economic activity and high inflation and interest
rates are discouraging buyers from making big-ticket purchases like
home appliances and electronic goods, according to economists.
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com
(END) Dow Jones Newswires
November 24, 2016 05:45 ET (10:45 GMT)
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