Brazil Retailer Guararapes Taps Safra for Stake Sale

(Bloomberg) — Guararapes Confeccoes SA, the Brazilian conglomerate that owns fashion retailer Riachuelo, is working with Banco Safra SA as it mulls a potential stake sale, according to people familiar with the matter.

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Shoemaker Arezzo Industria e Comercio SA and Grupo SBF SA, owner of sporting-goods retailer Centauro, are among the companies that have been approached, said the people, who asked not to be identified because talks are private. Neither decided to move forward with the deal, but other parties may still be involved in discussions, they added.

The Rocha family, which is the group’s controlling shareholder, is weighing a possible sale that could involve even giving up control, according to the people.

In a statement to Bloomberg, Guararapes said it hadn’t hired any bank to negotiate a stake sale. The company also said that “it is always attentive to market opportunities that bring value to shareholders, but there is no basis that there would be a change in the company’s control.”

Guararapes was founded in 1956 by Nevaldo Rocha and his brother Newton.

Safra and Arezzo didn’t immediately reply to requests for comment. Grupo SBF declined to comment.

Shares in Guararapes are down over 25% since the beginning of the year, pushing its market capitalization to about 3.6 billion reais ($698 million). The stock extended gains and closed 9% higher on Friday amid the news it’s weighing a stake sale.

(Updates with the company statement on the fourth paragraph and share prices on the last one)