Suffering from successive losses since arriving in the country in 2001, Grupo Dia is throwing in the towel with a broad restructuring plan, at the end of which it will maintain only 244 stores in So Paulo, where its operations are concentrated.
Of Spanish origin, the group will close 343 stores, in the interior of São Paulo, Belo Horizonte, and three distribution centers. Today, the company has 587 stores. The plan is to sacrifice half the company to leave the half that is healthy. The big goal is to stop burning cash, according to a person close to the operation.
Over the years, the business accumulated a cash burn. In 2023, the loss was 154 million, with a negative free cash flow of 37 million. Last year, amid rumors of the sale of the Brazilian operation, Dia announced the arrival of Sbastien Durchon as CFO in the country. The Frenchman was CFO of Carrefour Brasil. This year, Durchon took over as CEO.
In a statement, the group stated that it will subsequently analyze different strategic alternatives for Brazil Day. The 244 stores maintained are concentrated especially in the capital, in some cities in greater São Paulo and in Santos, and around half of them are franchises. To maintain the stores, the Osasco distribution center will continue to operate.
The Clube Dia loyalty program and the sale of private brand products will also continue to operate, a very strong feature of the Spanish chain.
“The group will adjust its scope in the country to concentrate its business in the São Paulo region, where it has greater profitability and the concentration of stores allows it to expand the logistics network and reduce costs”, stated Dia in a statement.
The plan, approved by the board of directors, seeks to allocate resources to Spain and Argentina, more profitable markets with greater growth potential for the group and in which the company has a relevant position with its proximity markets strategy.
*With information from Exame/ Cover photo: Tiago Mazza/Futura Press
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