| SAO PAULO
SAO PAULO Nov 29 Lojas Renner SA,
Brazil's largest apparel retailer, will keep its ambitious
expansion targets even as consumer spending in the country shows
no signs of recovery, Chief Financial Officer Laurence Gomes
Lojas Renner forecasts it will grow its number of stores to
450 by 2021 from 290 currently. That would imply opening roughly
30 stores per year starting in 2017, a pace faster than in both
2015 and 2016.
The company originally estimated it would reach 408 stores
by 2021 but revised that figure in May, seeking to reap the
benefits of its efforts to boost operating efficiency amid
Brazil's two-year recession.
"Even in the face of a tough scenario, the company's
profitability improved, cash generation is growing and we
reduced debt," Gomes said in an interview on Friday.
Free cash flow rose 250 percent in the nine months to
September from a year before even as sales at stores open for
over 12 months remained nearly flat, a sign of increased
efficiency despite tepid demand.
Analysts at Goldman Sachs said in a client on Monday that
Lojas Renner "offers a compelling structural growth story"
supported by investments in its supply-chain, merchandising and
logistics, which give it a competitive advantage relative to
peers. They hold a "buy" recommendation on the stock.
Common shares in Lojas Renner, which also
operates the Camicado and Youcom store brands, fell 2 percent to
22.94 reais in early afternoon trading in São Paulo, paring
gains to about 36 percent so far this year.
($1 = 3.4027 reais)
(Reporting by Paula Arend Laier; Writing by Ana Mano; Editing
by Bruno Federowski and Paul Simao)