By Guillermo Parra-Bernal
SAO PAULO Jan 20 GPA SA, Brazil's
largest diversified retailer, on Monday tapped Ronaldo Iabrudi
as chief executive officer, in the latest step by controlling
shareholder Casino Guichard Perrachon & Cie to reassert its
influence at the company.
Iabrudi, a former banker at private-equity firm GP
Investments Ltd, was Casino's top
executive in Brazil. Iabrudi's appointment comes as Casino
spearheaded a management shake-up after winning control of the
company in 2012 and the exit of former partner Abilio Diniz last
A fluent French speaker renowned for his ability to
streamline costs and turn around sluggish companies, Iabrudi
will replace Enéas Pestana, who had run the São Paulo-based
company since March 2010. Pestana, also a former GP Investments
executive who worked with GPA for 11 years, tendered his
resignation early on Monday, according to a securities filing.
"The valuable experience of Ronaldo, coupled with his great
professional talent, will strongly contribute to the development
and success of GPA," Jean-Charles Naouri, who serves as Casino's
CEO as well as the chairman of GPA, said in the filing.
Iabrudi is taking over GPA as the 66-year-old retailer gears
up for an aggressive price war in its food business, where it
aims to maintain profitability by cutting costs. Executives
expect the push for more competitive prices in all GPA's
supermarket formats to win over more customers, a sign GPA is
girding for a tougher competitive landscape.
In a December presentation to unveil its three-year business
outlook, GPA said lower prices could be possible by running more
efficient stores, cutting corporate overhead and wringing cost
savings by working more closely with Casino.
GPA wants to lower general, administrative and sales
expenses to 17 percent of net revenue by 2016, from 19.6 percent
currently. The company expects to open 400 new food stores in
the next three years, while appliance unit Via Varejo SA may
open 210 stores during the same period.
The business plan takes stock of weaker growth and higher
inflation forecasts in Brazil in the coming years - a scenario
that will force retailers to fight for market share if they want
to keep up robust recent growth.
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Under Pestana, preferred shares of GPA surged 58 percent,
compared with a 28 percent tumble in Brazil's benchmark Bovespa
stock index. He helped oversee the integration of home
appliance retailers Globex Utilidades Ltda and Casas Bahia SA
into GPA, while steering the company through a bitter feud
between Casino and Diniz after the latter sought a merger with
Carrefour SA - Casino's arch-rival in France.
"GPA is grateful to Enéas for all that he represented to the
company in the past eleven years," Naouri was quoted as saying
in the filing. "His outstanding performance and loyalty to the
company's interest, even in the most difficult moments, deserve
all due respect."
According to Radar, a column on business and political
gossip by weekly magazine Veja, GPA will pay Pestana about 50
million reais ($21 million) for his departure. The amount
includes an indemnification for his early exit, plus a
non-competing clause and other retention expenses.
Efforts to reach Pestana were unsuccessful. Calls to GPA's
press office after working hours to confirm the Radar report
GPA's aggressive pricing strategy reflects the strategic
influence of Naouri and the possibility that Carrefour
lists a business unit on the country's stock exchange to help
pay for more ambitious expansion.
Iabrudi, a psychologist by training who owns a gourmet
coffee farm in the hills of Minas Gerais state in southeast
Brazil, has had highs and lows in a career marked by his
involvement in various sectors - from steel and mining to
telecommunications and, now, retail.
Between 2002 and 2006, Iabrudi was named by GP and other
partners as CEO of Telemar Norte Leste Participações SA, which
in 2008 merged with a rival to form Grupo Oi SA,
Brazil's No. 4 wireless carrier. His stint at the company was
mixed - with success in the cost control front but failure to
spark growth, a source with knowledge of the situation told
After being fired from Telemar, Iabrudi was tapped again by
GP Investments to run Magnesita, a producer of refractory
material for steel mills. Under Iabrudi, Magnesita leapfrogged
half a dozen rivals to become the world's No. 3 in the sector
through acquisitions and a strategy to improve productivity at
the company's mines. He ran Magnesita between 2008 and 2012.
Iabrudi also worked for Brazilian steelmaker Gerdau SA
, the world's No.2 producer of long steel products.