Owner of Azalea and Olympikus tries to rebuild operations

SAO PAULO-a company with revenues of RS $3.5 billion (in updated values for inflation), 29 factories and 45000 employees to a R $1.3 billion total revenue, three factories and 15000 employees. This was the transformation by which passed between 2010 and 2016, the Vulcabrás, the company that already held the title of largest manufacturer of footwear in the country and today has only 4 percent of the market.
After a heavy restructuring process, which lasted almost three years, the company returned to give positive signals to the market. Much smaller, after five years of losses, the company was able to register a profit in 2016, and 2017, should repeat the performance. In the first half, the company, which owns brands such as Azalea and PA had profit of $51.6 million, compared to R R $200,000 in the same period in 2016.
The transformation of Vulcabrás you can reach your peak next month, with the? new debut? of the company on the stock exchange. Today, with only a very small portion (1.79%) of their shares traded in B3, the papers have almost no liquidity. Therefore, the issuance of the shares, scheduled for October, is seen as a relaunch. The Vulcabrás also works for, until then, migrate to the new market segment of higher corporate governance, in a strategy to attract investors.
With the operation in B3 (the São Paulo Stock Exchange), Vulcabrás's shareholders intend to raise funds to pay off debts and invest in the industrial park, in addition to recover part of the capital injected in the company in the period of crisis, according to sources close to the operation, the founder Peter Grendene put some R $450 million in recent years. Sought, the Vulcabrás did not comment the information, arguing that it is in quiet period.
Resources
The contributions of family Grendene were one of the few options of available resources during the period of restructuring of the company. Between 2011 and 2015, before the high level of debt and low cash flow, the bank credit encareceu to the company. There was also a failed attempt to sell a stake to the Homeland Investment Fund until the Vulcabrás decided to hire the consulting Galeazzi, specializing in restructuring of companies and famous for drastic cost cuts.
With the Galeazzi on operations, began layoffs and factory closures. In December 2012, on the eve of Christmas, one of the most difficult moments in the history of the company: 12 factories in Bahia had closed its activities and about 3000 employees dismissed. The factories were all small, producing models of not lucrative footwear and had low level of productivity. The option was to keep the large units, concentrating on the production lines.
Radical cost cutting in the company, however, was not the only justification for the improvement in company performance. The economic crisis, which forced most of the Brazilian consumers to migrate in their shopping for cheaper products and just helping in national recovery of the company.
Just last year, the import of shoes throughout the country retreated 28.5%. Date of 2017 until August, the retraction is 0.3%. The tennis Olympikus, main product of Vulcabrás, are priced lower than the imported, despite the appeal of design and technology, which ended up favoring the mark.
Importing shoes at competitive prices, registered in the period before the brazilian recession, had been one of the factors that had led to Vulcabrás to the crisis.
Positioning
The retail specialist Alberto Serrentino, founder of consultancy Varese Retail, says that all nationals, as Queen and Topper, suffered from competition with foreign women. ? Brazilian women unable to compete directly with the imported sports segment. They need to invest in a niche or create the perception of customer value, show that their products have a quality or a superior design considering the price positioning?, says.
For Edson D? Aguano, also an expert in retail, the company improved the design of the Pa. Azaleia shoes, however, still do not stand out among competitors, he says.
The President of Brazilian footwear industries Association (Abicalçados), Hector Klein, says that the sector is still in a difficult phase and that only the consolidated brands that invest in design, has obtaining survive. ? The Vulcabrás is one of the ones who have had an interesting growth?, he added. The information is from the newspaper O Estado de s. Paulo.