Life continues to make Vivara happy
In his fourth tri, Vivara achieved a significant increase in gross margin, mainly due to the expansion of Life, its brand for silver products, which was the focus of the group’s expansion.
Life – whose gross margin lies around 10 percentage points over Vivara – made up 37.7 % of the company’s sales at the end of December, compared to 32.1 % in the previous year.
This increase in turn gave the gross margin a thrust that rose by 2.7 percentage points to 70.8 %. CEO Paulo Kruplesky told the Brazil Journal that the company had “created” without relying on an opponent “.
“It was a year in which we harvest the investments that made the company, the infrastructure, the back office and forwarder, and get the people on board who are needed for the business.” Netto turnover rose at 17, 2 % to $ 644 million in Tri, with Vivara increasing 0.5 stock points to 17.4 %.
The adjusted EBITDA was $ 178 million with a margin of 27.6 % and the net profit $ 157 million, which corresponds to an increase of 24 %. The numbers – the highest in the company’s history for a quarter – came together primarily with the forecast of Sellside, which had already expected a strong result.
Vivara opened 53 new stores last year, 39 of them under the Life brand. For this year it is planned to maintain the pace and continue to concentrate on the silver brand, the market positioning of which is supported by Price Point and its young brand image.
In addition, silver products “have higher profitability than gold, which makes the return on investment of business much higher than with Vivara.” “With interest in where they are, we can rely more on them.” With new openings this year, Life is already the second largest jewelry shop in Brazil, only behind Vivara itself.
The third largest is Pandora, followed by Monte Carlo. Vivara has 336 sales outlets, including 243 Vivara, 72 Life and 21 pack. Since life continues to exceed the company this year, Chief Financial Officer Ottavio Lira said that the gross margin will tend to continue to grow.
The good result falls at a time when the jewelry industry suffers from dollar high-end stands, of which small and medium-sized companies in this industry are particularly affected.
“Today it costs twice as much gold as three years ago, and this reality fills out a lot. The costs for the refracking of shares have doubled and the costs for the success have occurred, but they have flexible scaling,” said the CFO.
“In addition, many small jewelry shops lost sales in 2020 and 2021 because they were not ready to become digital.” This scenario made it possible to consistently win the game.
On the cost dynamics in the industry, the CFO said that the gold price after the blowout in 2021 started a little and began to work with a certain stability and fluctuated on the lawn between 285 and $ 315-“one more level” than the costs Vivara, who usually operates with a share.
In practice, this means that cost increases only arrive in the company after 10 to 12 months. “During this time we can pass on the price or make changes to the system to increase operational efficiency.”
Vivara has a circular capital structure-a franchise retailer in the current scenario. The company has a net assets of $ 157 million ($ 382 million in cash compared to a total debt of $ 225 million).
