Banker’s heirs hired consulting firm Galeazzi to restructure business
06/28/2023
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Chain with 36 stores in São Paulo, Rio de Janeiro, and Espírito Santo has been put up for sale — Foto: Divulgação
The heirs of banker Aloysio Faria, of Alfa Bank, have hired the consulting firm Galeazzi to restructure the building material chain C&C, two sources familiar with the matter say. After analyzing the retailer for 60 days, the diagnosis was clear: it will be necessary to close at least a third of the stores, according to a person familiar with the matter.
With 36 stores in São Paulo, Rio de Janeiro, and Espírito Santo, the chain has been put up for sale but has not attracted any interested buyers. Faced with the loss of profitability, the heirs of the banker deceased in 2020 asked the consulting firm Galeazzi to study C&C.
With revenues below R$1 billion, the company has already begun to lay off executives and will close at least 12 stores by the end of the year, Valor found. There is a consensus that the model of large stores for building materials retailers is no longer working well and that at least a third of the group’s stores are loss-making. The chain grosses R$70 million to R$80 million a month.
The banker’s heirs have asked BTG Pactual to gauge interest in the business. The operational restructuring is expected to be completed by the end of the year. A smaller chain is seen as more attractive to buyers.
In the market, there is an understanding that chains such as C&C and Telhanorte, which was also put up for sale, must change their business model. According to another source familiar with the matter, the building material chains is unlikely to become a 100% digital platform, since consumers visit stores and make a purchase decision after seeing the products.
To adapt to the new environment, companies like Telhanorte and Leroy Merlin are betting on smaller-format stores — which will allow them to enter neighborhoods and new markets —, providing services to consumers, such as the installation of equipment, and expanding e-commerce operations.
C&C was one of several companies founded by Aloysio Faria, who resisted the idea of getting rid of the business, even with the restructuring carried out in recent years. Since the founder’s death, the banker’s five daughters have sold the group’s main business — Safra bought Banco Alfa for R$1 billion, as well as the Alfa theater and Transamérica hotel, which will be transformed into an entertainment complex.
According to another source, the lack of a succession, which should have been carried out by the banker, caused the dismantling of the conglomerate in the last three years. Lucia, Junia, Flavia, Claudia, and Eliana, Aloysio Faria’s direct heirs, never participated directly in their father’s business. Each of them inherited 20% of the banker’s business. Mr. Faria was once a billionaire on the Forbes list. He usually had the final say in his businesses and trusted few executives.
The Agropalma (palm oil) company and the La Basque ice cream chain are still controlled by the family and are also expected to be sold, according to sources familiar with the matter. However, Agropalma is also not attracting interest. The family also owns Águas da Prata mineral water.
One of the most well-known bankers of his generation, Aloysio Faria, who died in September 2020 at the age of 99, had a degree in medicine. He inherited the Banco da Lavoura de Minas Gerais from his father at the age of 28. Years later, he and his brother Gilberto Faria split the business and Aloysio Faria founded Banco Real (which was sold to ABN Amro in 1998 for $2.1 billion).
Galeazzi declined to comment. C&C and the family’s spokespeople did not reply to the requests for comment.
*Por Mônica Scaramuzzo — São Paulo
Source: Valor International