December 10, 2015
3704/2015-SAE
Magazine Luiza S.A.
Mr. Roberto Bellissimo Rodrigues
Investor Relations Officer
In reference to: Request for clarifications of news article
Dear Sirs,
The news article published by Agência Estado – Broadcast, on December 10, 2015, says, among other
information, that this company:
1.
has the intention of keeping 2015 gross margin level into 2016;
2.
expects to make lower investments in expansion during 2016 with lower real estate costs.
We have not identified any of these pieces of information among the documents the company delivered
to us through the Empresas.NET System. Should this information have already been provided, please
inform us which document and pages it can be found, as well as the date on which it was delivered.
It is worth emphasizing that the company must disclose periodical and non-recurring information, as well
as any other information of the market’s interest, through the Empresas.NET System. This ensures the
immediate and broad disclosure of information and the equal treatment given to company’s investors
and other market participants.
Accordingly, we require that the company provides us with clarifications of the above mentioned items
up to December 11, 2015, whether confirming or denying this information, as well as other information
deemed important.
The file to be sent need to include a transcription of the consultation content above placed before the
company’s answer.
This request is under the Cooperation Agreement entered into between the CVM and the
BM&FBOVESPA on December 13, 2011. Should this not be responded, the company may be subject to
injunctive fine by CVM’s Company Relations Department (SEP), in compliance with CVM Rule 452/07.
Sincerely,
Nelson Barroso Ortega
Company Monitoring Department
Copy to: Brazilian Securities and Exchange Commission (CVM)
Mr. Fernando Soares Vieira – Company Relations Officer
Mr. Waldir de Jesus Nobre – Market and Agents Relations Officer
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The company’s answer must be sent exclusively through the IPE module, by selecting either Material
Fact or Notice to the Market as Category, Clarifications on CVM/Bovespa consultations as Type, and
News article published by the press as Subject. Thus, the file will be transmitted simultaneously to the
BM&FBOVESPA and the CVM.
December 10, 2015 12:00:29 – AE NEWS
MAGAZINE LUIZA EXPECTS LOWER INVESTMENTS IN EXPANSION IN 2016 WITH LOWER REAL
ESTATE COSTS
São Paulo, December 10, 2015 – Magazine Luiza is “considering with great discipline” the opening of
new stores in 2016, said the company’s CEO, Frederico Trajano. In São Paulo, he affirmed to
journalists that the chain expects to reduce investments in new stores because of the reduction in “real
estate rents.”
“We are not paying any key money anymore, and we are committed to open stores only in places that
offer lower rents per square meter,” he said.
He stated that the company may opt to close some stores in 2016, but only stores located in places
where the rents cannot be renegotiated. According to him, however, the balance between store closing
and store opening must be positive, that is, the company expects that the number of stores opened
exceeds the number of stores closed.
Mr. Trajano also commented on the company’s gross margin. The main competitor, Via Varejo, has
been informing that it expects lower margin for the next year. Mr. Trajano, however, affirmed that the
company has the intention of keeping 2015 gross margin level into the next year. But he reiterated that
the margins will depend on competition scenario. (Dayanne Sousa – dayanne.sousa@estadao.com)
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São Paulo, December 11, 2015
To
BM&FBOVESPA S.A. – Securities, Commodities and Futures Exchange
Issuer Monitoring Management
Attn.:
Mr. Nelson Barroso Ortega
Copy to:
Brazilian Securities and Exchange Commission (CVM)
Company Relations Department
Market and Agents Relations Department
Attn.:
Attn.:
Mr. Fernando Soares Vieira
Mr. Waldir de Jesus Nobre
In reference to: SAE Official Letter 3704/2015 – News article published by Agência Estado –
Broadcast, on December 10, 2015 (“Official Letter”)
Dear Sirs,
MAGAZINE LUIZA S.A., publicly held company with head office at Rua Voluntários da Franca, 1465, in
the city of Franca, state of São Paulo, inscribed in the roll of corporate taxpayers (CNPJ/MF) under
number 47.960.950/0001-21, represented herein according to its Bylaws (“Company”), in compliance
with the Official Letter, hereby provides clarifications of news article published by Agência Estado –
Broadcast on December 10, 2015 entitled “Magazine Luiza expects lower investments in expansion for
2016 with lower real estate costs” (“News Article”).
1.
The Company believes that the News Article was extracted from the clarifications provided by
the Company’s management at the annual meeting held on December 10, 2015 (“ML Day”). During this
event, the Company’s main executives meet market analysts and key investors to present the changes
in its main economic indicators throughout the year, and the participants have the opportunity to
understand in details the policies and measures adopted by the Company.
2.
For the event, the Company prepared a presentation (available on its website, under section
“Investors”, named “ML Day Presentation”) that shows the business growth in its diverse areas of
operations. It is worth emphasizing that both the aforementioned written presentation and the
Company’s executive speeches show the Company’s concern to disclose concrete, true and precise
figures.
3.
The News Article, object of this clarification, includes the following sentence: “the company has
the intention of keeping 2015 gross margin level into 2016.” However, it is a personal expectation of the
Company’s Chief Executive Officer, Mr. Frederico Trajano, based on 2015 historical comparison figures,
and it indicates that the Company does not intend to succumb to Brazil’s evident economic recession.
He also reiterated that the behavior of margins will depend on competition scenario.
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4.
Based on the Company’s historical figures, according to its Reference Form, the gross margin
has remained generally stable over the past three years, varying around 0.5% at maximum per year. So
Mr. Frederico Trajano’s quote saying that the company has the intention of “keeping the level” simply
reflects the Company’s performance over the years, which is consistent with the levels already practiced
in the current year.
5.
In addition, the News Article affirms that the Company “expects to reduce investments in new
stores because of the reduction in real estate rents.” This is also a personal opinion of Mr. Frederico
Trajano, considering Brazil’s current adverse economic scenario, mainly with regard to real estate
market. Thus, this must not be considered a Company’s projection, because it is only a possible trend in
the real estate sector.
6.
Accordingly, the quote saying that “the balance between store closing and store opening must
be positive, that is, the company expects that the number of stores opened exceeds the number of
stores closed” also reflects a personal opinion based on the Company’s organic growth over the past
years. According to historical data included in the Reference Form, the number of stores has
continuously grown, from 743 in 2012 and 744 in 2014 to 756 in 2014.
7.
These personal expectations neither are, and must not be considered or understood by
investors as, a Company’s concrete outlook (guidance) for the gross margin or investments in
expansion for 2016, nor be considered by investors as the basis of concrete expectation of future
results.
8.
It is worth emphasizing that the Company does not present any estimated goals or growth
expectation for the following years, since it follows the policy of not presenting projections to the market,
according to the Company’s Reference Form made available to this Commission.
9.
Thus, the Company reinforces its commitment to disclose precisely and correctly its information
to the market, and that it has never made, and does not intend to make, any projections. Should the
Company decide to make such projections someday in the future, it will take the required normative
measures.
We remain at your disposal for further clarifications.
Sincerely,
MAGAZINE LUIZA S.A.
Name: Roberto Bellissimo Rodrigues
Position: Chief Financial and Investor Relations
Officer
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