Dia Brasil, a subsidiary of the Dia group, has submitted a request for “judicial recovery”, the tool under Brazilian law that companies must use to try to overcome a negative economic and financial situation. Specifically, the subsidiary doubled its losses in 2023, from 72 million in 2022 to 154 million in 2023. The group announced last February the closure of 343 supermarkets and three warehouses in the country “to try to give greater stability to its operations in the country waiting to define new strategic decisions, such as the one referred to today,” the company detailed in its statement.
In the communication to the CNMV, the group emphasizes that the request for “judicial recovery” is limited exclusively to Dia Brasil. This process has nothing to do with or impact in any way on the financial situation of the Spanish and Argentine subsidiaries, where it has currently achieved “a relevant position with a strategy focused on local food distribution.”
This request comes after the communication on March 14 of the restructuring process in Brazil, due to the “persistent negative results recorded.” The company made the decision to close 58% of its establishments in the country and concentrate its operations in the São Paulo area, where it has 244 supermarkets and where it has greater profitability.
The CEO of Grupo Dia, Martín Tolcachir, already announced at the end of February, after the presentation of the 2023 results, that his departure from Brazil was being evaluated after the negative impact that the Rio business has had on the annual accounts. “We are evaluating different strategic options, but no decision has been made to date, but it will be taken throughout the year,” said the group’s CEO.
Tolcachir then acknowledged that the Brazilian business had “suffered” during the past year in a “really difficult” market context with a decrease in volumes, an intensification of commercial investment and promotional aggressiveness. “We have recorded results that are not in line with our expectations,” he stressed.
This disinvestment in Brazil, where it has 590 supermarkets (419 owned and 171 franchised), would be added to those already carried out last year with the exit of businesses that they do not consider key in their business of betting on proximity. The company sold 233 large format stores to Alcampo. In addition, he sold the Clarel perfumery brand to the Trinity Group, and left Portugal, after the agreement reached with Auchan for the sale of the Minipreço stores.
