Corporate history and profile

Corporate history and profile

OVERVIEW

Vivara is Brazil’s largest jewelry chain. We design, create, produce, market and distribute our products all over Brazil through a vertical integration and omnichannel strategy that involves offline sales through over 260 points of sale and online sales through our own website. In the fiscal year ended December 31, 2020, we registered net revenue of R$1.0 billion, adjusted EBITDA of R$216.3 million, adjusted EBITDA margin of 20.7% and net income of R$146.7 million.

Our more than 5 million registered customers across the country enrich data intelligence that drives our successful marketing strategy, which resulted in sales of approximately 3.6 million pieces leaving our main distribution center located in the city of São Paulo.

The Brands

 We have almost 60 years of experience building a portfolio of brands – Vivara, Life by Vivara, Life Vivara, Vivara Watches, Vivara Fragrances and Vivara Accessories – in the jewelry, watches, perfumes and accessories segments, which accounted for 51.9%, 30.0%, 15.1% and 3.0%, respectively, of our revenues in the year ended December 31, 2020.  These brands are associated with democratic products that feature modern and high-quality design, are accessible to diverse income segments and can accompany our customers in different stages of their lives, thus enabling us to capitalize on the growth of retail in Brazil regardless of income group, besides promoting greater flexibility and dilution of risks during adverse economic scenarios. Moreover, our Vivara brand does not have a direct competitor in the segment and profile in which we operate, considering the pillars of luxury, access and recognition, with price tags ranging between R$150 and over R$100,000.

Since we ourselves produce around 80% of our pieces, we have a flexible product mix. During the recession in Brazil between 2015 and 2016, we decided to ramp up the production of silver items instead of gold items. As a result, our sales remained stable, with an increase in the share of silver products, whose margins are higher than of other categories.

Vivara: Launched in 1962, it is associated with a traditional, elegant and modern brand targeted at customers aged above 30 and who value quality and sophistication.

Life by Vivara: Launched in 2011, it is associated with a younger audience, aged 15 and above, that values fashion and seeks more relaxed and collectible items at affordable prices. Initially, the brand portfolio included bracelets and pendants.

The brand’s first kiosk was inaugurated in 2014, when the brand added rings to its portfolio. The following year, we opened the first physical store entirely dedicated to the brand and added the necklace and leather bracelet categories. In 2016, the brand started offering products for men and, in 2018, for pets. Currently, the Life by Vivara segment has around 2,400 active SKUs.

In 2013, we created an Instagram profile for the brand, which currently has 1 million followers. Over the years, we established partnerships with digital influencers and renowned brands such as Disney (in 2014). In 2017, we established a partnership with actress Marina Ruy Barbosa and 10 other influencers, who jointly have around 29 million followers.

Vivara Watches: Launched in 1980 to sell proprietary or third-party brands to customers above 30 looking for classic, elegant and/or urban watches. Currently, we market 18 watch brands in Brazil, including our own brands (Vivara and Akium), brands exclusively distributed by us in Brazil (Tommy Hilfiger, Tommy Jeans, Coach, Ferrari, Movado, Hugo Boss Black, Olivia Burton, Festina, MVMT, Nautica and Lacoste) and other third-party brands under non-exclusive agreements (Tag Heuer, Baume et Mercier, Bulova, Victorinox and MontBlanc).

Vivara Fragrances: Launched in 2015, our youngest brand is targeted at women over 20 and is part of our B2B strategy aimed at expanding the distribution reach of our products.

Vivara Accessories: Launched in 2000, this eclectic and affordable brand enables us to offer our customers a wider variety of products under our own and third-party brands, giving them an end-to-end buying experience.

Our marketing team has been actively investing in an integrated communication strategy across the physical and online channels to keep step with the entire journey of our customers. Our brands already enjoy excellent visibility in the online channel – we have more than 3.6 million followers on Instagram (combining the Vivaraonline and Lifebyvivara profiles), over 57 million followers reached through our three brand ambassadors (Gisele Bündchen for Vivara, Marina Ruy Barbosa for Life by Vivara and Cauã Reymond for our portfolio of men’s products). We also completed our regional communication strategy through partnerships with over 30 micro digital influencers, reaching more than 68.5 million people. We also have thematic lines in partnership with large corporations such as Disney and Pixar, which jointly have more than 24 million followers.

Our Model and Presence

 We use a vertically integrated business model, which ensures greater control and flexibility in managing the production chain – from creation and design to production, marketing strategy, distribution (omnichannel) and sale of our products – with an annual production capacity of about 3.1 million pieces. We have a team of designers focused on innovation and trends, who are responsible for launching more than 30 annual collections. Around 80% of our products are crafted at our production unit in the Manaus Free Trade Zone, State of Amazonas, where we constantly invest in technology and other improvements to drive operational efficiency in order to maintain consistent quality standards and consolidate our position as both the market leader and benchmark.

We are present in all regions across Brazil and currently 99% of our points of sale are located in shopping malls, which offers us a competitive advantage in terms of ramp-up time of our points of sale and safety for our customers and products. We also have three distribution centers, located in the cities of São Paulo, Embu das Artes and Diadema (only packaging), all in the state of São Paulo, which supply our physical and online sales channels. We have a highly efficient distribution process that is capable of delivering our products to points of sale (DC-points of sale) in about 3 days on average and to consumers (online sales) in São Paulo within 4 hours. Our operations are concentrated in Brazil’s Southeast region – the country’s richest – which accounts for 53% of the GDP and nearly 54.2% of our gross revenue as on December 31, 2020.

The following map shows the geographical distribution of our points of sale, distribution centers and our plant on December 31, 2020. At the end of 2020, our points of sale were distributed as follows: 51% in the southeast, 11% in the mid-west, 18% in the northeast, 4% in the north and 16% in the south.

Our mission is to serve our customers with excellence and offer them the best buying experience. We have an omnichannel sales platform that offers a versatile and flexible shopping experience. We classify our points of sale into three clusters (targeted at customers with different levels of purchasing power) and over time we developed the capacity to create a store ambience, including the choice of construction materials and the architecture that will decorate the points of sale, as well as a portfolio of products available for customers adapted to clusters and the target public. As such, our products are offered through points of sale adapted to the clientele they are targeted at, thereby providing a customized buying experience.

Currently, our channels consist of (i) Vivara physical stores; (ii) hybrid kiosks; (iii) Life by Vivara physical stores; (iv) Life by Vivara kiosks; (v) exclusive kiosks for Tommy Hilfiger watches; and (vi) online sales channels, which offer exclusive content and products. Our model gives us the flexibility and capacity to adapt to diverse markets and target customers. In 2020, sales through physical and online channels accounted for 75.9% and 30.4%, respectively, of our revenues net of returns. Our online channel gained prominence in 2020 due to the closure of stores during the year and the Joias em Ação project launched to meet the digital demand, through which our customers were served through WhatsApp.

Our strategy follows the customer-centric concept, by which all initiatives and actions are designed to satisfy our customers, identifying their needs and offering the best buying experience, which earned us a Net Promoter Score (NPS) of 90 in a survey among our customers, a score that is comparable to that of large domestic and international retailers2. We offer personalized services to our customers through experienced and constantly trained teams. We believe that this customized service, which we call “assisted sales”, results in greater customer loyalty, turning the buying experience unique and more pleasant, especially because our customers look for a buying experience in which they can touch and feel the product. Approximately 32% of our customers are returning customers and shop with us more than once a year. In recognition of our customer service, the Reclame Aqui3 website and ALSHOP elected us as the best customer service in the “Jewelry & Watches” category. In the case of ALSHOP, we had already won this recognition more than three times in a row.

We have people management tools based on data analysis that enable us to efficiently manage the performance of our employees using Strategy tools that incorporate individual targets.

We provide intensive training to our sales team through 50 “school stores” for on-site training and an e-learning platform for remote training. We have an aggressive compensation policy, in which the variable component of salaries is 65%. Another highlight is that more than half of the current sales managers were promoted internally. In 2020, we spared no effort to bring our team closer despite the physical distance. To uphold transparency and constant dialogue, we organized 68 virtual lectures, sent over 230 internal communications and newsletters (at an average of 23 per month) and implemented numerous endomarketing actions. Our training programs did not stop; they were held virtually and dynamically via webinars and livestreams. Our training platform registered 3,220 active users, with 68 hours of training per employee and 167 items of content.

To ensure consistency in customer service and quality experience, we have several monitoring tools based on KPIs, which enable us to identify critical points and draw up specific action plans for each point of sale (such as the “Programa Vitrine” and “Show Me”). Moreover, each point of sale must be visited at least twice every 60 days by our operations team, which consists of one national manager, four general managers, 15 regional managers and one manager per point of sale.