Luiza´s Message

Cycles and its Challenges

In 1991, when I took over as new CEO I implemented a new cycle which was in place for the next ten years. From 2002 until 2014 the cycle was named “Sustainable Growth”. In 2015, a new cycle began which should last for another 5 years “Digital Transformation”. This new cycle featured a new app launch for our e-commerce sales, which can be used by smartphones to make purchases. Also, we implemented our Mobile sales strategy, Mobile inventory app in stores, as well as Mobile apps for shipping and deliveries.

On the current cycle, in order to become a more digital company, the Company is promoting a broad revolution in its brick and mortar stores – for example by reducing the time to finish a sales pitch from 45 minutes to 5 minutes. The digitalization process speeds up sales done via our e-commerce website as well, but we can’t ignore the logistics of the products we sell, after all we are a multichannel retailer. We believe a lot in our multichannel strategy as one of our pillars. This is the result of the investments done over the last few years in the integration of the distribution networks for both e-commerce and brick and mortar stores.

Logistics, IT and Innovation (Luizalabs) have gone through significant changes during 2015, which resulted in important accomplishments and optimization of internal actions, which in turn generated essential accomplishments, increased our productivity and reduced expenses. During 2015, 30 new stores were open and 62 remodeled under the Revigorar project. The objective of Revigorar project is to remodel stores at lower costs compared with the cost of a full remodeling.

Social inclusion is also one of our pillars. Through a well structured program which has received many awards, and whereby we encouraged the areas to hire people with some sort of deficiency, as well as upgrades in our offices and stores to adapt to handicap people, training of employees to allow the person with disability to feel welcomed by our Company and adapt well. In 2015, more than 1,000 people with some form of disability were working for the Company.

All of these engagement initiatives, training and inclusion of disabled people have contributed for Magazine Luiza to be considered one of the best companies to work for in the ranking by Instituto Great Place to Work (GPTW) for 19 consecutive years. The Company has always been ranked among the top 25 companies in Brazil for many years. In 2015 it ranked sixth place.

Through its community works, the program named Rede do Bem benefited more than 34 thousand people from 55 different cities, with the engagement of about 3,300 employees of Magazine Luiza. The Company also donated products to 62 different social entities in 25 cities across Brazil. Cultural projects, sports events and different social activities from many communities received some sort of support or sponsorship from the Company. These resources were made possible as a result of specific tax incentives programs offered by the Brazilian Government. Altogether, 30 projects benefited directly 28,800 people from different cities within Brazil.

In Brazil, Magazine Luiza has become a reference in the management of intellectual capital so to pursue its digital path, as part of its new strategic positioning, with a very well defined objective: to provide access to many which is currently a privilege of a few people. In order to reach this goal, the projects that have been implemented thus far and future projects are defined so to target the emerging middle class in Brazil (C/D income classes). Through the digitalization of our stores, customers will receive a more agile and efficient shopping experiences, without compromising the human kindness and excellence in customer service and after sales support, which are part of our pillars and which we don’t plan to ever give up.