Arezzo and Grupo Soma, Two Brazilian Fashion Giants, Announce Merger
Brazilian fashion giants Arezzo and Grupo Soma announced on Monday their agreement to merge, creating a new entity with projected revenues of 12 billion reais ($2.42 billion). The combined company will be 54% controlled by Arezzo, with Grupo Soma’s shareholders holding the remaining 46%.
The merger will bring together over 2,000 company-owned and franchised stores and a portfolio of 34 brands. The companies have yet to decide on a name for the newly formed entity. As part of the agreement, Grupo Soma shareholders will receive 0.12 new Arezzo & Co shares for each Soma share they currently hold.
Alexandre Birman, the current CEO of Arezzo & Co, will lead the new organization.
This merger comes at a time of intensifying competition in Brazil's fashion market, which includes players like Lojas Renner, Guararapes, and C&A. The sector has faced growing challenges from rising interest rates and the entry of Chinese fast-fashion giant Shein into the country.
Guadalupe Dorey
Leading the editorial, social media, and video strategy and operations for Brazil's top women's lifestyle magazine. Editor at DFashionMagazine.com, ParisModaMagazine.com and LatinoFashionMagazine.com