LREN3

Lojas Renner S.A. traces its origins to the entrepreneurial history of Antônio Jacob Renner, who in 1912 founded the A. J. Renner group, a manufacturing company in Porto Alegre (RS). In 1922, the first retail outlet was opened in the state capital to sell textile products, with special emphasis on pure wool cloaks known as Capa Ideal, aimed at men’s clothing and widely used by gaúchos from the Campanha region, traveling salesmen and city dwellers. From 1940 onward, with the expansion of its product mix, the business evolved into a department store. Lojas Renner S.A. was formally incorporated on June 10, 1965, and on May 4, 1967, the company became publicly traded, with shares now listed on B3 under the ticker LREN3.

Throughout the 1990s, the company underwent a major restructuring, replacing the traditional department store model with the concept of a fashion-focused department store, which marked a significant shift in its positioning. Starting in 1994, it launched a broad geographic expansion plan, opening stores in Santa Catarina, Paraná and later in the country’s main economic hub, the state of São Paulo. In subsequent years, Lojas Renner moved into Rio de Janeiro, Minas Gerais, the Federal District and several other states, consolidating its presence in all Brazilian states and the Federal District in 2014. In 1998, control was transferred to the American company J.C. Penney Brazil, Inc., and in 2005 the company converted preferred shares into common shares, joined B3’s Novo Mercado and became Brazil’s first corporation, with 100% of its shares in free float and no controlling shareholder. In 2006, a stock split was carried out to increase liquidity and facilitate access for investors, including smaller ones.

Lojas Renner’s business model has evolved into an omnichannel fashion and lifestyle ecosystem that integrates different brands and physical and digital channels. The company presents itself as a leader in omnichannel fashion retail in Brazil, bringing together the brands Renner (its core business, accounting for 91% of total net revenue), Camicado, Youcom, Ashua, the financial company Realize CFI and the digital platform Repassa. At the end of 2024, the company had 686 stores in operation, combining physical points of sale with e-commerce and apps, in a model that seeks to integrate the shopping journey across multiple channels. The administrative headquarters remains in Porto Alegre (RS), complemented by offices in China, Vietnam and Bangladesh and three distribution centers, which support retail operations and supply chain management.

In the retail segment, classified as the main operating segment, Lojas Renner sells clothing, fragrances, cosmetics, watches, home and décor products, and also operates urban delivery services and logistics management solutions. Operations cover the Renner, Camicado, Youcom, Repassa and Ashua banners, the logistics company Uello and operations in Uruguay and Argentina. The Renner brand focuses on fashion for the mid/upper-income public, offering clothing, accessories, underwear, footwear, cosmetics and fragrances for women, men, children and teenagers, with collections developed by an in-house team based on trend research, fashion shows, national and international fairs and observation of urban behavior. Camicado operates in the home and décor segment, with a strong presence of its private label Home & Style, while Youcom is positioned as a youth fashion brand with an urban lifestyle. Ashua is a brand specialized in curve & plus-size fashion, with a value proposition centered on fit, comfort and style within an omnichannel experience. Repassa, in turn, is a native digital platform focused on the resale of clothing, footwear and accessories, with an emphasis on sustainability.

In addition to retail, the company operates in financial products through Realize Crédito, Financiamento e Investimento S.A. (Realize CFI), a financial institution 100% controlled by Lojas Renner. This segment is responsible for offering personal loans, purchase financing, insurance and other typical credit company operations, as well as commission revenue from marketplace services, sales intermediation, urban deliveries and customized logistics management solutions. Realize operates the Cartão Renner, a private-label card created in 1973, and Meu Cartão, a co-branded card launched in 2012 with Mastercard and Visa brands, usable both inside and outside Brazil. For purchases at Renner, both allow installment payments in up to five interest-free installments or up to ten installments with finance charges, supplemented by personal loans and an insurance portfolio. This financial arm strengthens the company’s ability to offer integrated payment and credit solutions, increasing engagement among customers in its fashion and lifestyle ecosystem.

Lojas Renner has been expanding its geographic footprint beyond Brazil. In the domestic market, it has consolidated its presence in all states and the Federal District, supported by highly automated distribution centers such as those in São José (SC) and Rio de Janeiro (RJ), which contribute to logistics efficiency, reduced lead times and less need for price markdowns. Internationally, the company began operating in Uruguay in 2017, with stores in Montevideo primarily targeting mid/upper-income women, expanding the network to nine stores and adding e-commerce and a hub for receiving imported products directly from Asia in 2019. It also entered Argentina in 2019, with four stores in Buenos Aires and Córdoba, following the same positioning focused on mid/upper-income women. The company also maintains offices in China, Vietnam and Bangladesh to support product imports and development, with imported items, mainly from these countries and also from Peru, Argentina and Uruguay, accounting for around 30% of sales.

From a production standpoint, the company uses its own processes for developing collections, integrating trend research, product design and close relationships with a network of suppliers. The in-house team creates prints, color palettes and lifestyle concepts that are translated into seasonal collections tailored to Brazil’s different climates and regional preferences. Starting in 2012, Lojas Renner carried out an investment cycle focused on the “Fashion Retailer” concept, renovating and expanding its store base, developing its supplier chain, reducing response times and increasing the number of collections, with attention to environmental and social practices. In recent years, it has intensified the use of technology and artificial intelligence in trend capturing, digital product development and supply chain management, including digital collections using 3D tools, body scanning and hyper-realistic simulation. The company has also increased the so-called reactivity of its collections, with a significant share of products being developed and purchased in season, shortening decision cycles and reducing exposure to assortment errors.

In terms of regulation, Lojas Renner points out that it does not operate in a regulated sector that requires specific concessions, but it does depend on municipal operating licenses, fire department permits and compliance with zoning rules in each location where it operates stores and facilities. It is also subject to consumer protection rules, particularly the Consumer Defense Code, which governs relations with its customers on issues such as the right to clear information on products, prices and risks. The company has also adapted to the General Data Protection Law (LGPD), which came into force in 2020, adjusting its operations and business model to ensure the safe and responsible use of personal data, in line with the guidelines of the National Data Protection Authority (ANPD). On the environmental and social front, the company guides its activities by the goal of “making fashion in a responsible way,” including initiatives related to sustainability, increasing the share of sustainable raw materials in its collections and internal programs focused on diversity, inclusion and strengthening its organizational culture.

For individual investors looking at LREN3 shares on B3, Lojas Renner presents itself as a discretionary consumer retailer with a strong focus on fashion, a multi-brand architecture and a significant presence in consumer financial services. In 2024, the retail segment accounted for approximately 87% of total consolidated net revenue, while financial products represented around 13%, underscoring the importance of the fashion business in the company’s revenue generation. Its recent strategy has been based on organic store expansion, increased digital penetration, productivity gains across the value chain and the evolution of the omnichannel model, with an emphasis on technology, data intelligence and logistics integration, aiming to sustain growth and profitability within a diversified fashion and lifestyle ecosystem of national and regional scale in South America.