The Brazilian retail sector has shown some life in 2018, growing by 2.3 percent—its best result in five years. Even so, the country’s biggest retailer, Via Varejo, posted a net loss of BRL 267 million.
As a matter of fact, Via Varejo has been in trouble for a while now. In 2015, the company saw its profits shrink by 99 percent—followed by a BRL 95 million net loss in 2016. The company appeared to bounce back in the following year, but 2018 results show that the problems run deep.
For many, including its controlling shareholders, there is only way out of this hole: selling the company to a foreign player. However, bidders are nowhere to be found. According to analysts, Via Varejo’s frailties and problems go some way toward explaining the scarcity of offers. But the case also reveals a lot about foreign companies’ unwillingness to enter the Brazilian market—after many giants have failed to thrive in Latin America’s largest economy.