SAO PAULO (Reuters) - Brazilian upscale malls operator Iguatemi Empresa de Shopping Centers SA plans to roll out its e-commerce platform Iguatemi 365 to five new cities after seeing sales grow 20 times during the COVID-19 pandemic, executives said on Wednesday.
“We’re in final stages of negotiation to add more relevant brands to our platform, with plans to take Iguatemi 365 to five new cities to be announced in the next few days,” Chief Executive Carlos Jereissati told analysts and investors in a call on quarterly earnings.
On Tuesday night, Iguatemi reported a 77.5% tumble in its first-quarter net income compared with the same period a year ago, as the coronavirus outbreak led to the closure of all its malls in the second half of March.
Analysts at BTG Pactual said results came in line with expectations, highlighting Iguatemi’s conservative stance in provisions for rental delinquency in March.
“We see a bleaker scenario for malls, since we don’t know exactly when malls will reopen and we think that the ‘mortality rate’ of smaller retailers will be high, impacting malls’ collection of rents,” analysts Gustavo Cambauva and Elvis Credendio wrote in a report.
Iguatemi only started to resume activities late in April and now has about a third of its portfolio, comprised of 14 malls and 2 outlets, operating with reduced opening hours, according to Jereissati.
He noted that customer flow has fallen between 40% and 50% in the reopened malls, but the sales conversion rate is positive. “Customer shopping is more assertive now,” Jereissati said.
Shares in Iguatemi were up 0.4% at 33.75 reais after hitting a high of 34.76 reais at the opening on Wednesday.
Reporting by Gabriela Mello; Editing by Chizu Nomiyama and Steve Orlofsky