Brazil's Iguatemi sees customer flow at least 50% lower in reopened malls; shares fall

​Brazilian upscale malls operator Iguatemi Empresa de Shopping Centers SA sees customer flow at between 35% and 50% of what it used to be before the coronavirus pandemic, its Chief Financial Officer said on Wednesday.

“It is still early to assess post-pandemic consumption patterns, especially as we are operating with reduced opening hours in most of our malls,” CFO Cristina Betts told analysts and investors in a call on the Covid-19 impact on operations.

“Sales conversion varies according to each mall and also depends on categories,” she added, highlighting home appliances as one of the most successful ones.

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After resuming activities in all of its portfolio, comprised of 14 malls and 2 outlets, Iguatemi was later forced to again shut the doors in some locations such as in the southern city of Porto Alegre to curb Covid -19 contagion.

Still, with most of its malls reopened, Iguatemi has started to gradually scale back discounts in maintenance and advertisement fees that were granted to merchants during the pandemic.

“We can’t keep giving discounts forever even if the malls are operating with reduced opening hours,” Betts said, noting the policy on rental exemptions will be adjusted to each case.

She added some of the operating changes introduced by the novel coronavirus, including a drive thru system in which customers can retrieve goods bought online, are likely to remain in place even after the pandemic is over.

The company also plans to expand its e-commerce platform Iguatemi 365 to five new Brazilian cities after seeing good results in Sao Paulo, the country’s biggest and richest one, during the outbreak, Betts said, adding an app is likely to be launched next year.

Shares in Iguatemi were trading 3.7% down on Wednesday afternoon at 34.51 reais, reducing gains so far this month to around 6%.