Let me start with a number that will bother a lot of people.
Inditex — owner of Zara — earned €38.6 billion globally and delivered €5.86 billion in net profit. We are talking about a net margin of 15%. In fashion retail.
A sector where nine out of ten businesspeople swear by the fact that tight margins and price wars are immutable laws.
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Meanwhile, here in Brazil, traditional retail sets off fireworks to celebrate double-digit growth in revenue (the famous topline), but it struggles to show a positive final balance sheet at the end of the year.
When the profit comes, it seems like a miracle; when it doesn’t come, it’s always the fault of the interest rate, the government, the exchange rate or the latest Chinese trading platform. cross-border who started advertising on the internet. Someone needs to tell the truth: the problem of Brazilian retail is not macroeconomic; and management, process and culture.
The numbers the market prefers to ignore
When you look at high-performance global retail, you find a surgical standard of efficiency.
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Walmart operates a revenue of US$713 billion with a margin of approximately 2.7%. Does it seem like little at first glance? It’s enough to generate $19 billion of pure net profit.
They manage more than 10,000 stores in 19 countries with the precision of a Swiss watchmaker. It’s not magic; it is a relentless obsession with operational efficiency.
In the same ecosystem, we see the H&M capture margin with 30% of its sales already digitalizeds, and Primark delivering almost 12% operating margin without even operating an online store. As? Fast turnover, lean stock and an operation without any type of fat or waste.
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Zara designs, produces and puts a piece on the shelf in 15 days. This is not a marketing strategy or a cute TV commercial; is the biggest competitive differentiator of supply chain of the world.
It’s speed with control. It is execution with method. Now, turn the lens to the Brazilian scenario.
The case of Americanas is the most painful and emblematic example of what happens when the ecosystem applauds uncontrolled growth without auditing efficiency.
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A digital retail empire was built, fueled by investment funds, which behind the spotlight burned cash and masked reality.
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The fraud was the legal trigger, but the culture that allowed that operation to balloon without anyone asking the most basic question of commerce — “Wait a minute, where’s the real money from this operation?” — is the symptom of a management mentality that needs to be extirpated from our market.
Sales cure almost everything, but they don’t fix bad management
I’ve spent my entire life on the sales front. I set up an e-commerce platform, helped digitize thousands of retailers at VTEX, lead sales strategies Go-To-Market and I defend a clear thesis: Without revenue there is no business, sales are the company’s lifeblood.
But what I tire of seeing are retailers that master the art of generating traction, invest tons of money in paid media, influencers, marketplaces and physical expansion, but operate with a completely broken internal structure.
The side effect of this myopia is mathematical: the company grows in revenue and bleeds from within.
The entrepreneur becomes a slave to volume. He needs to sell more today just to pay for yesterday’s hole in inefficiency. The person who understood this game before any native digital retailer in Brazil was Mercado Livre.
They didn’t look at e-commerce just as a sales channel or an online catalog; they looked at it as an infrastructure and ecosystem challenge. They integrated proprietary logistics, financial services, credit and internal technology.
The result? They operate with double-digit margins in emerging markets.
The reality check I witnessed in New York
In May of this year, I was in New York participating in the Brazil Week — the epicenter where the main corporate leaders, investors and authorities meet to dictate the direction of capital in Brazil.
And I’m not talking about conceptual stage talks; I’m talking about backroom conversations, small lunch tables, and closed forums where billion-dollar decisions are made.
In one of these moments, sharing the table with XP leaders and former president Michel Temer, the The central debate revolved around our fiscal perspective and the necessary reforms for Brazil in 2027.
Next door, Edgard Corona, the man behind Smart Fit, detailed how he structured a global standard operation capable of attracting the most skeptical foreign investor on Wall Street.
The most striking direction, however, came from Martin Escobari, partner at General Atlantic, one of the largest investment funds private equity of the planet.
He looked at the group and said: “Don’t give up on Brazil”. And this wasn’t social media motivational advice; it is a pragmatic asset allocation thesis.
International capital knows that Brazil has resilience and the ability to execute at scale.
That same week, G4 had the honor of ringing the Nasdaq bell, celebrating the historic milestone of 1 million jobs created by companies that use our management methods.
Being there was not an act of institutional vanity.
It was empirical validation that when a medium-sized businessman exchanges improvisation for method, he becomes unstoppable, regardless of credit lines or the political scenario.
What caught my attention most in New York was not the optimism for our country — after all, resilience is the surname of Brazilian entrepreneurs.
It was a drastic change in the agenda. The conversation finally stopped being just about “how to raise the next round of funding” and it became about real efficiency. About contribution margin.
The global pattern of silent leadership
When management fails, the size of the company only accelerates the speed of decline. In the United States, Bed Bath & Beyond was once one of the brightest brands in retail focused on home and decoration, appearing in the prestigious Fortune 500 ranking. It had reach, a strong brand and loyal customers.
Where is she today? It closed its doors and declared bankruptcy.
The company’s leadership distanced itself from the store floor and focused on complex financial engineering — billion-dollar share buybacks and accounting maneuvers to please the market in the short term — while the real operation rotted.
The stores were left without maintenance, the supply chain It went bankrupt due to lack of investment and the sales team lost its way. The result was a debt of more than US$5 billion and zero operational capacity.
This pattern is identical to what we observed in dozens of retail chains in Brazil. You change the currency, you change the accent, but the dynamics of operational negligence are exactly the same.
Technology is not support; is the heart of the strategy
There is a phrase I heard in New York that perfectly summarizes the key turn that national retail urgently needs to make: “Technology and data infrastructure is not a matter for the IT department. It is the CEO’s main agenda”.
In Brazil, a huge portion of businesspeople still see management systems, ERPs, CRMs and artificial intelligence as operational cost lines that must be squeezed as much as possible.
While major world leaders use real-time data to predict demands, optimize logistics routes and make purchasing decisions based on predictive algorithms.
The transformation we need is not a transformation of liquidity or financial input; it is an executive mindset transformation. Brazil has plenty of capacity to lead and export brilliant business models.
Take the case of Wellhub (formerly Gympass), which was presented in international panels as one of the biggest global references in practical use of AI applied to the corporate ecosystem.
The role of this column
I didn’t take over this space at InfoMoney to rub anyone’s head or to repeat comfortable clichés from conference stages. Anyone who follows me in the market knows that my language is that of practice, of the mistake made on the skin and the result measured at the checkout at the end of the day.
Zara does not swallow its competitors because it is based in Europe or because it has access to a different consumer market. She wins because she designed a business model where speed of reaction and financial control go hand in hand.
Choosing how you will manage the processes, culture and efficiency of your operation today is what will determine whether your brand will be a market powerhouse or just a nostalgic memory ten years from now. The amateur retail game is over. It’s time to play the adult game.
