Advent International Corp., the private equity firm that agreed to acquire 80% of Walmart Inc.'s Brazilian operations, plans to convert the U.S. retailer's underperforming hypermarkets into cash-and-carry wholesale stores rather than open new ones, Reuters reported June 5, citing Patrice Etlin, a managing partner at Advent.
Etlin reportedly disclosed the plan at an industry event in São Paulo, adding that Advent intends to invest "billions of reals" in operations over the next two years.
Etlin added that they intend to expand Walmart's brands, including Maxxi and Todo Dia, along with membership-only retail chain Sam's Club. According to the report, Advent has not yet decided which of the regional brands acquired by Walmart in Brazil over the last 20 years will be kept.
The report comes a day after Walmart said it will exchange 80% of Walmart Brazil for up to $250 million in contingent consideration. The retail chain expects to record about $4.5 billion in non-cash net losses as a discrete item for the second quarter from the transaction.
As of June 5, US$1 was equivalent to 3.76 Brazilian reais.
