Luiza magazine focuses on the margin with high Selic and avoids entering the free shipping war

The Luiza magazine will try to protect its profit margins in an environment with basic interest rates of 15%and will avoid the launch of an aggressive commercial strategy with the offer of free shipping when they do not identify the margin of positive contribution, the executive president of the company Frederico Trajano said on Friday.

The company issued the net loss of the night of the eve of $ 24.4 million, after a profit of $ 23.6 million the previous year. The gross margin remained over 30%, but retired from 0.4 points to 30.5%.

“In the next 12 months, with Selic’s 15%, we must maintain a very strong discipline on the margin,” said the manager in a conference with analysts.

“We do not enter the discussion on the entry of categories with margins of negative contribution,” said Trajan referring to the market segment, the so called “3p”, selling third -party products and citing the “free shipping war”.

Rivals such as the free market and shops have promoted aggressive commercial actions, with free shipping supplies for purchases of small values respectively of R $ 19 and R $ 10.

“At this moment of interest to 15% we must be careful and we must look for a positive contribution margin,” said Trajan, referring to the economic indicator that measures how much a sale helps a company to cover its fixed costs.

Source: Terra

Rose

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