SAO PAULO (Reuters) - Advent International, the buyout firm acquiring 80 percent of Walmart Inc’s (WMT.N) Brazilian operations, plans to invest in converting store formats instead of opening new ones, an executive said on Tuesday.
Walmart, the world’s biggest retailer, announced on Monday it sold an 80 percent stake in its Brazilian operations to Advent, partially exiting an underperforming business and taking a non-cash charge of roughly $4.5 billion.
Patrice Etlin, a managing partner at Advent International in Brazil, said at an industry event in Sao Paulo that the firm would invest “billions of reais” over the next two years in the operations and expects to convert unprofitable hypermarkets into cash-and-carry wholesale stores.
Advent plans to expand brands developed by Walmart in Brazil such as Maxxi, used in cash-and-carry stores, and Todo Dia, of small-scale supermarkets, along with the membership-only retail chain Sam’s Club, Etlin said. Advent’s partner said hypermarkets face the most challenging scenario.
Under the terms of the agreement, Advent will pay Walmart royalties just for the use of its global brands. The buyout firm said it has yet to decide which of the almost dozen regional brands acquired by Walmart in Brazil over the last 20 years will be kept.
Reporting by Carolina Mandl; Editing by Leslie Adler and Grant McCool