Brazilian Retail News

Year 10 - Issue # 383 - São Paulo, April, 18th, 2011

Phone: (5511) 3405-6666

Centauro to open 100 stores until 2012

Centauro, Brazil’s largest sporting goods retailer, will invest R$ 343 million (US$ 206.63 million) to open 100 stores
until the end of 2012. The company will loan R$ 260 million (US$ 156.63 million) from development bank BNDES and
will invest directly the remaining value. The goal is to open stores in all Brazilian states, mainly in cities with more than
200,000 people. Most of the new stores will be located in shopping centers.

Itaú purchases 49% of Banco Carrefour

Itaú Unibanco, Brazil’s largest bank, announced the purchase of 49% of CSF, French Carrefour’s bank branch, for R$
725 million (US$ 436.75 million). CSF offers and distributes financial services in Carrefour’s stores in Brazil, today with
7.7 million accounts and R$ 2.25 billion (US$ 1.36 billion) in the receivables portfolio. The transaction is still depending
on approval by the country’s Central Bank.

Online retail sales to skyrocket 178% in Brazil

Online retail sales will soar 178% in Brazil in the next five years, jumping from US$ 7.9 billion today to US$ 22 billion
in 2016, according to Forrester Research. The growth will be driven by the electronics segment, that today accounts for
around 37% of online sales, so said the institute.

Boticário to increase cosmetics sales by

24% during Easter season
The candy segment is not the only to see sales going up
during the Easter season. O Boticário, the world’s largest
cosmetics and perfumery chain, with more than 3,000 stores
in Brazil alone, intends to increase its sales by 24% over the
same period last year, betting on two comemorative packs in
its limited edition Fun Collection Surprises, with perfumery
and personal care items. This is the second year Boticário
offers limited Easter editions, in a move to be an alternative
for consumers who don’t want to go on chocolates.

Brazilian Retail News 1 18/04/2011

Brazilian Retail News
Year 10 - Issue # 383 - São Paulo, April, 18th, 2011
Phone: (5511) 3405-6666

Retail sales rise 8.2% in February

Brazilian retail sales rose 8.2% in February year-on-year, according to the statistics agency IBGE. The pace was basically
the same as in January and in the last 12 months sales have gone up 10.4%. The result was in line with forecasts, and
is due to a stronger comparison base and government measures to cool down demand, specially in durable goods, and
kills inflation.

Pão de Açúcar Q1 sales up 6.8%

Pão de Açúcar, Brazil’s top retailer, said its same-store
sales had in the first quarter of the year a 6.8% year-on-
year growth, a strong slowdown from the 12.5% and 11.5%
reported in the last two quarters last year. According to the
company, food inflation and the Easter in late April slowed
down sales in Q1. Food sales rose 5.6% year-on-year, to
R$ 6.64 billion (US$ 4 billion), completing four consecutive
quarters of slowing sales. In the Globex electronics
division, same-store sales rose 6.4%, with total sales
jumping10.9%, to R$ 5.73 billion (US$ 3.45 billion), below
market expectations. Online retail sales soared 33%, way
below the 63% jump in Q4 last year.

Spendings to rise in the North and Northeast

The perspective of a 14% rise in the minimum wage until next year may lead the growth of family spendings in the
North and Northeast to Chinese levels, specially in low-value goods as food and beverage, according to an LCA Consulting
study. In the Northeast, workers getting minimum wage are 35.2% of total workers, while in the North they are 27% - the
country’s average is of 20.7%.

Iguatemi resumes acquisition policy

Midclass consumers became in the last years the center of the strategy of nine out of ten companies in the country,
but one of the exceptions is Iguatemi shopping center group, whose 12 malls are targeted on high-end consumers in the
Southeast and South regions, the country’s richest. To continue growing, Iguatemi has been targeting acquisitions again,
in the first moment increasing its share in the shopping centers it already owns and purchasing other ones, instead of only
building greenfield malls. Together, Iguatemi, BR Malls and Multiplan, the country’s top three shopping center developers,
own less than 20% of the market and there are many possible takeover targets.

Overdue payments to continue rising in H2

Consumers overdue payments index rose 1.7% in February month-on-month, in the seventh straight advance, to 97.8
points. According to Serasa Experian, the figure shows overdue payments will continue to rise this semester and in the
beginning of H2, as consumers’ debts have been rising, inflation has been up, credit has become more expensive and
the economy shall rise in a slower level.

Brazilian Retail News 2 18/04/2011

Brazilian Retail News
Year 10 - Issue # 383 - São Paulo, April, 18th, 2011
Phone: (5511) 3405-6666

Momentum
Spreading wings
Marcos Gouvêa de Souza - CEO, GS&MD - Gouvêa de Souza

In the last weeks, two moves were in the foreground in the Brazilian retail. The first one was the purchase of homeware chain
Camicado by department store group Renner, still to be cleared by the authorities. The second was the official announcement of
Magazine Luiza’s IPO. In both cases, clear signs of the increasing speed of evolution of the maturity of the Brazilian retail segment.

As for the acquisition of Camicado homeware chain, with main street and shopping center stores, the company has been
increasing its sales continually in the last years, but clearly with restrains to expand faster. Renner’s purchase marks a strategic
business expansion movement. Until recently focused on a single store format, a single brand and on a restrict product offer,
Renner has been advancing to occupy a broader market positioning and increasing its wallet share, today concentrated in the
high and midclass population. It started expanding its business to the financial services. Then, with a compact store format that
allows the company to go to emerging markets where a conventional store would not fit. And, now, diversifying brands, products,
store formats and business, somehow in the process going back in time, as Renner in the past used to offer homeware goods.

This is an important strategic movement, for sure leveraged by the expansion opportunities the Brazilian market has been
offering and by the perspective this scenario will remain positive in the next years. But also an ambitious movement of a company
that had, as its motto, cautiousness and a slow growth of its business.

On the other hand, the announced IPO of electronics chain Magazine Luiza is part of a more ambitious project of a company
that is widely known for its constant innovation, boldness and willingness to take advantage of the opportunities the market has
been creating.

From its innovative project of electronics stores in emerging markets, using the internet supported by assisted sales, to open
shops in segments and regions that would not be feasible for their traditional stores; going to pioneer e-commerce activities (it
is today one of the country’s largest e-players); bringing an investor to its business; almost purchasing Ponto Frio chain (lost in
the last second to Pão de Açúcar); opening 40 stores at a time in the São Paulo region; and recently moving its headquarters
to São Paulo, the company has consistently innovating. To do this, it has been strongly supported by the relationship with
customers and suppliers, in its communications, in the development of new store formats, in new sales channels, and in the
business model as a whole.

The two news, in the same week, point to the eagerness Brazilian retailers have changed themselves to take advantage of
the perspectives of the country, contributing to a faster evolution of the sector, of its representativeness in the economy, and,
most important, of the evolution of its maturity in the global scenario.

According to the Global Retail Maturity Index (GRMI), developed by GS&MD – Gouvêa de Souza, the maturity of the Brazilian
retail rose from 16.3 points in 2005 to 32.9 in 2010, the strongest rise of all 20 countries studied, as a result of this scenario of
deep and structural changes the segment has been living in Brazil. And that tends to continue this way, with the ongoing and
irreversible consolidation, globalization, professionalism and formalization process the country has been experiencing.

Brazilian Retail News (BRN) is a weekly newsletter published by GS&MD - Gouvêa de Souza with the most important news
on the Brazilian retailing. The content can be freely used, once the source is quoted. If you want any information on BRN or our
services, please send an email to publicacoes@gsmd.com.br or access GS&MD - Gouvêa de Souza at www.gsmd.com.br.

Gouvêa de Souza & MD Desenvolvimento Empresarial Ltda.

Av. Paulista, 171 - 10º floor
Paraíso – São Paulo – Brazil – Zip Code: 01311-904
Phone: (5511) 3405-6666 – Fax: (5511) 3263-0066

Brazilian Retail News 3 18/04/2011