Casas Bahia closed 38 stores — and 40-60% of their demand moved next door

Grupo Casas Bahia's reorganization through 2023 closed 38 stores and readjusted three distribution centres, with five more being replanned. CEO Renato Franklin said the group expected to start a new expansion plan in 2024, but only once cash generation exceeded interest payments, expected between 2024 and 2025 — a gate that could be brought forward depending on Brazil's macroeconomic recovery.

The closures were remarkably painless on demand: between 40% and 60% of the business from shuttered units migrated to other nearby stores. Physical operations stayed 'resilient' — gross merchandise volume grew 0.2% in the third quarter to R$5.6 billion and 3.9% in the first nine months, to R$17.19 billion — while the company claimed leadership in offline market share per Neotrust data.

The strategy concentrated strength: own e-commerce sales would focus on 'core' categories where Casas Bahia held large market share — by September, its TV share had risen 17.9 percentage points versus 2019, appliances 9.3 points, telephony 7.9, computing 7.6 and furniture 6.8. Low-value items like cleaning products would stay on the marketplace, with a curated rather than expansive roster of sellers — Franklin argued 'having the best offers' beat a wide range that included low-reputation suppliers whose problems became the company's costs.

40-60% of closed stores' demand migrated to nearby units; TV market share up 17.9 points versus 2019, appliances 9.3, telephony 7.9.

Store closures were judged on catchment overlap: where a nearby unit could absorb 40-60% of demand, the lease savings outweighed the lost sales.

Distribution centres were repurposed rather than simply shut, preserving logistics capacity while cutting duplicate cost.

Concentrating own-sales on high-share 'core' categories defended margin against pure-price e-commerce competition.

A curated marketplace with fewer, better vetted sellers avoided the intermediation and reputational costs of low-reputation suppliers.

Rationalising an overbuilt store network works when you measure demand migration: if the closed store's customers simply walk to the next one, the rent you saved is pure margin.

The restructuring was not yet a turnaround: the quarter's net loss reached R$836 million, roughly four times the year-earlier loss, though still below the group's worst — R$854 million in late 2019, at the height of an accounting-fraud investigation over labour processes. Store expansion remained gated on cash generation covering interest payments, with Franklin holding out the option to accelerate if the macro economy recovered.