In retail sets, the competition will increase

The arrival of the American Gap only confirms that the fashion retail in Brazil, a very fragmented sector, is becoming a big market. And that, going forward, the environment of competition will be particularly difficult for smaller networks or less capitalized.
For now, the Gap has confirmed just two stores (both in São Paulo) until the end of the year, but no one doubts that the retailer, whose net sales totaled $ 15.7 billion last year, has more ambitious plans for Brazil. With 1,600 stores in total, and already present in Chile, Uruguay, Panama, Colombia, Peru and Mexico, the company opened 50 units in China in 31 months.
The Gap comes to join the multinational group sets already present here, as the Dutch C&A, a leader in apparel in the country, and the world's largest in the segment ' fast fashion ' Zara, the Spanish Inditex Group. On the market, it is expected the arrival of Swedish H&M, second international ranking in size. The English Top Shop has made his debut at the Mall Iguatemi and JK the Australian Cotton On must also disembark soon found the value.
All together will split a large pizza-fashion retailing in Brazil should earn R $ 170 billion in 2013, according to the Institute for studies and Industrial Marketing (Iemi)-, but that tends to grow in more modest speed in the coming years, a prediction that is already in the national accounts Renner, Riachuelo and Marisa.
Anyone who wants to guarantee space in the apparel market, need to capitalize to start a more aggressive expansion plan and invest in improving controls, innovation and efficiency. Obviously, to gain access to cheaper products via imports, networks need scale.
Traditional retailers as TNG, Animale, Farm Valdac (Siberian, Crawford and Memove) and, in the most popular segment, Besni, are some of the companies who are in search of a partner, industry sources. The Besni denies that is for sale. The TNG has stated that it is "confidential for legal issues". And says that a supply of Valdac investors is a hypothesis under study.
For almost a year, the Farm Animal stayed in conversations with the Tarpon. Not reached an agreement, but plans to join a strategic investor remain. The most recent acquisition of Tarpon, which has tradition in fashion retail, was the mark Morena Rosa, in Paraná, last year.
So far, the only major operation closed this year was the purchase of the Seller by the Leader of BTG Pactual, which aspires to be a Consolidator in a market where the four largest networks (C&A, Renner, Riachuelo and Marisa) hold slice less than 12%.
The fact is that the environment is not so conducive to mergers and acquisitions in the sector, for two reasons. One of them is that sales of the networks they skate, putting a brake on the appetite of investors. As important as it is the fact that they are buyers, forces traditional temporarily, out of the game.
Not now, the holding company Inbrands (Ellus, VR and Richards), controlled by holding company Vinci Partners, is taking a break from shopping to "clean up" after a period of several acquisitions. Also focusing on regaining profitability is the Officer Group (owner of Le Lis Blanc), managed by Artesia, whose last acquisition was the brand Rosa Cha, in 2012, the year in which the Osklen pillowed in the arms of his Sneakers.
Douglas Carvalho, owner of the boutique mergers and acquisitions Advisor Target, says there's still plenty of interest in the sector's assets, but the funds have been increasingly demanding in matters of governance and audit. "Just have a brand known and well positioned is obligation," says Carvalho, who advised the sale of brands VR, Bobstore, Los Dos, Mandi, Bazahr and Naka Emporium, between 2010 and 2012.
Another source in the business says several operations this year are jammed because it is difficult to convince the owners that weak sales at the moment, their companies are not worth as much as they thought. The mission gets even more complicated since the funds, just enjoying the short-term scenario hard, want to get bargains. As is customary, the negotiations have parked on the issue of price, which can go from eight to 14 times Ebitda in the fashion sector, according to experts.