“Tariff”: Price in the industry is lower than we imagined, says CEO of Casas Bahia

Amid the restructuring of the manner of the Casas Bahia group, CEO Renato Franklin is facing a macroeconomic scenario that considers, at the very least, “difficult to predict.” Therefore, while believing in a market that does not grow in 2025, even with incentives, avoids giving too much weight to elements outside their reach as a manager.

It has been so in the last two years since taking office. “Our decision to make harder movements were right, so as not to have the improvement of macro – which ended up confirmed even worse,” he told the program Infoomoney Interviewremembering the expectation – in force until last year – that Brazilian interest rates would fall instead of climbing.

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What does not invalidate real effects and already felt of a global context in transformation – on which, of course, nothing can do. The new US import tariffs policy, for example, seems to be the guys on the prices practiced by some industry segments. “We are doing better prices for Mother’s Day than at Black Friday – and for industry investment,” he said. Its view is that Brazil, less impaired than other countries by “tariff”, is seen as a market to explore by suppliers and new entrances.

In the interview, Franklin also commented on the movement of relevant shareholders of the company, such as Rafael Ferri and Michael Klein, who have led to shares in recent weeks. He says management is passive in the subject and points out that he does not see discussions about the strategy adopted so far. “All sides believe that the greatest growth is in the physical store and the credit, that we have to find the capital structure. Everyone wants profit more than growth.”

See the full interview in the player above or check out the main excerpts below:

Infoomoney – How is the macro scenario, with high interest rates and tariff war around the world, read by the company’s management?

Franklin – No one can know exactly how the macro scenario will be. There are many variables and a global context that is not our particular. Our decision to make harder movements were right, so as not to have the improvement of macro – which ended up confirmed even worse. Many people said we were cutting into the meat, that with interest falling the market comes and the dilution effect is relevant. I didn’t want to count on that and it was right.

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In the second half of 2024, we had a boost, especially in the white line and furniture, which helped us. By 2025, the tendency is to have a more sideline market that does not grow even with incentives. It’s hard to predict what comes ahead. It has the complexity in resolving tax issues, the tariff discussion that will bring global inflation. We don’t have exchange rate exposure, but our suppliers have. Particularly, I think we have to work with a very conservative scenario.

Although, as there is an election next year, several incentive revisions will benefit our consumer audience. It has a little liquidity injection that helps us, such as income tax exemption for those who earn up to R $ 5,000, incentive programs and subsidy that reach the most needy population.

Infoomoney – What about the effects of the tariff war?

Franklin – When we talk to international suppliers, they see a less globalized world with the tariff war, and this has a complexity in themselves. But in liquid, Brazil tends to be strengthened, with Agro exporting more to China, for example. And Agro suffered a lot last year, which impacts our growth in the Midwest and Northern Brazil. If you really have a better, it helps us. And if the industry in general will sell less to the United States and Europe, it will prioritize Brazil a little more.

Now for Mother’s Day, for example, we are doing better prices than Black Friday – and industry investment.

We get better negotiations, which helps on the company’s margin and offer even better conditions to customers. And the scale helps us. Prices are much lower than we imagined they would be in May.

Infoomoney – How have you been combining the tradition of the Casas Bahia brand with the digital sales environment at this time of transformation of the company?

Franklin – The pandemic has brought the need to accelerate digital, and today digital sales account for 40% of the company’s revenue. Our brand is “Top of Mind” for 19 consecutive years in appliances, but we are general “top of mind” in the Southeast – that is, who thinks of a brand, thinks of Casas Bahia. This is very cool because we can sell both triple and “normal” Brazilian, say.

In digital, the greatest example of this is that we launch the digital “meat”. There are cities that do not have any store in Casas Bahia, but people can do a meat on the site or in the app. This has allowed us to reach 116 million customers, of which 40 million authorize us to talk via WhatsApp. Along with the commercial scale and the discounts we offer, this gives us a lot of strength.

Now let’s start showing a little bit what is the challenge of digital – that if you leave it, it grows a lot with the installment on the card without interest. As this hurts profitability and is not the best capital allocation, I prefer to grow in the physical store and the credit.

Infoomoney – In recent weeks, Casas Bahia’s actions have had strong volatility, motivated by bulky purchases from investors such as e. How does the management of the company receive these movements?

Franklin – We are passive in this. Our job is to pack the operation, the capital structure and deliver the result in the last line. One of ours is that we have a lot of individuals at the shareholding base, which brings a different market dynamic. In March, for several days, the actions moved more than $ 150 million. This is very relevant, no one has set up a position of this size. This movement is a purchase, another sells, starts rumor, it will happen or that.

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Another point that brings volatility is that as the foreign investor left Brazil, the entire market was very short. It fires short squeezes More often, and worldwide, not only in Brazil. In the company, as the discount is very large, it turned out to be percentage.

It has discussion of shareholders, and we leave it by shareholders. We are here to work, we have a good relationship with all of them, we try to maintain transparency and governance, ensure that the management team is focused on the operation.

I see no strategy discussion. All sides believe that the greatest growth is in the physical store and the credit, that we have to fix the capital structure. Everyone wants profit more than growth. We see no misalignment.

Infoomoney – Michael Klein sought to have a representation in the Board of Directors and expressed believing that the company needs to resume the growth route. Somehow this discussion brought additional points to the management strategy?

Franklin – There is no change in the company’s strategy. Our focus remains the same. We believe we have to make a profit to grow. We have talked to the various stakeholders And everyone is aligned with this position.

The discussion of representativeness may exist at any time. Each shareholder has the right to question who represents him. Here, the same shareholder is the one who approved the current council – so in the right flows, according to governance, can request the review. It may have discussion, it is part of any open company.

Infoomoney – A discussion of the last weeks was the possibility of including a clause of poison pill in the company’s statute to avoid a hostile offer. Why was the idea set aside?

Franklin – A poison pill It is a structure to protect the current shareholder. In the case of a hostile acquisition, we wanted to create a protection for current shareholders. But again, it is a discussion of shareholders, and if they understand that it does not need this protection or that there are other better paths, the assembly is sovereign.

There was a discussion of shareholders, who came to the conclusion that this is not time to do poison pill. The company is a little more exposed from the point of view of stock control. We do not see any imminent movement, but while administration we understand that the poison pill It is a good practice to protect minorities from a corporation.