MGLU3 Magazine Luiza

Magazine Luiza S.A., commercially known as Magalu and listed on B3 under the ticker MGLU3, is one of the largest retail chains in Brazil and a pioneer in integrating physical and digital operations in the country. The company’s history began in 1957 in Franca, in the interior of the state of São Paulo, with the founding of a small store by Luiza Trajano and Pelegrino José Donato. Over the following decades, the company expanded through organic growth and regional acquisitions such as Lojas Mercantil, Wanel, Lojas Líder, Lojas Arno, Base, Kilar, Madol and Lojas Maia, establishing a relevant presence in several Brazilian states. In 2011, upon completing its initial public offering, its shares started trading on B3, marking a new phase of access to the capital markets and accelerated investments in logistics, technology and geographic expansion.

Magazine Luiza’s business model evolved from a traditional retail chain of durable goods focused on the middle class into a multichannel digital platform that combines e-commerce, physical stores, marketplace, financial services, logistics and technology. The company structures its results into four main segments: Retail, Financial Operations, Insurance Operations (divested in 2023) and Other Services. In 2024, the Retail segment accounted for virtually all net sales revenue, with 99.4% of the total, highlighting the predominance of merchandise resale and associated services, both in stores and in e-commerce, including the marketplace. Financial activities, consortium, logistics and software development operate as complementary arms, strengthening the retail ecosystem and expanding sources of revenue and profitability.

Magalu’s retail operation covers a broad and constantly expanding assortment. Traditionally strong in categories such as phones, major and small appliances, imaging, furniture and computers, the company began operating more intensively in Home and Décor, Fashion, Beauty and Fragrances, Books, Auto Accessories, Food and Beverages, Sports and Leisure, among others, especially after the launch of its marketplace in 2016. In the digital channel, it already offers tens of millions of items, many of them in the so‑called long tail, sold both from owned inventory (1P model) and by thousands of sellers on its platform (3P model. Well‑known brands such as Samsung, Motorola, Whirlpool, LG, Electrolux, Apple, Dell, Esmaltec, Mondial and Panasonic are among its main suppliers, alongside major marketplace partners such as MadeiraMadeira, Dell, E-fácil, Rihappy, Connect Parts, Acer and Lenovo, among others. In 2024, total sales reached R$ 65.3 billion, with a strong weight from digital channels, which accounted for R$ 46.1 billion.

Magazine Luiza’s channel infrastructure combines physical and digital presence in a multichannel model. As of December 31, 2024, the company had 1,015 conventional physical stores, with showrooms and their own inventory, and 230 virtual stores, a format that operates without physical inventory, with a digital catalog and sales associates assisting customers via multimedia terminals. E‑commerce is accessed through the main website and proprietary apps, as well as through the specialized platforms Netshoes, Zattini, Shoestock, KaBuM! and Época Cosméticos. The company also offers telesales, corporate sales and the Parceiro Magalu Pessoa Física channel, which allows any user to sell Magalu products over the internet on a commission basis. Integration between channels enables features such as in‑store pickup for online orders and after‑sales service at physical units, reinforcing the value proposition of a digital platform with physical points spread across the country.

The company has developed an ecosystem of brands and digital businesses through strategic acquisitions and investments in technology. Notable acquired operations include Integra Commerce (integration of merchants with marketplaces), Logbee/Magalog (last‑mile logistics), Softbox (e‑commerce solutions for retail and industry), Netshoes and its related brands (online retail of sporting goods, footwear and apparel), Kabum (technology and gaming e‑commerce), Época Cosméticos (beauty and fragrances), Estante Virtual (book marketplace) and AiQFome, complemented by Tonolucro and Plus Delivery (food delivery platforms). These acquisitions reinforced category diversification, expanded the base of customers and sellers, and gave rise to internal service platforms such as Magalog in logistics and technology solutions shared with group companies and marketplace merchants.

On the logistics front, Magazine Luiza has consolidated a distributed network of distribution centers and fulfillment solutions to support the growth of e‑commerce and the marketplace. Magalog, its logistics arm, operates as an integrated provider, with a network of strategically located distribution centers, pickup from sellers’ inventories (cross‑docking model via Magalu Entregas), warehousing and transportation for both its own products and third‑party products. Magalu Multichannel Fulfillment allows the same logistics flow to serve physical stores and 1P and 3P operations, leveraging installed capacity to reduce delivery costs and shorten lead times. This multichannel logistics structure is a key component of the value proposition for small and medium‑sized sellers, who gain access to a nationwide distribution infrastructure.

In addition to product retail, Magalu’s ecosystem includes financial and consortium services. Through its affiliate Luizacred, in partnership with a large national bank, the company offers credit cards, direct consumer credit (CDC), personal loans and other financial products associated with durable goods sales. Subsidiary Luiza Administradora de Consórcios operates consortiums for vehicles, real estate and other goods, complementing its financing offering. MagaluBank has emerged as a digital financial services platform, focusing on credit, accounts and solutions for consumers and sellers, seeking to reduce financial frictions throughout the consumption chain. The company also operated in insurance through Luizaseg, an extended warranty company that was sold in 2023, while retaining revenue linked to commissions on insurance products sold to its customer base.

Magazine Luiza’s operations remain concentrated in Brazilian territory, with all sales carried out in Brazil and no material concentration in any single customer. The revenue base is highly diversified among end consumers, reinforcing its typical mass retail profile. The company emphasizes the digital and financial inclusion of consumers and small merchants, using its store network, online channels and complementary services to integrate analog retail into the marketplace environment. The combination of well‑known brands, logistics scale, physical capillarity and proprietary technology solutions consolidates Magazine Luiza, through its MGLU3 shares traded on B3, as one of the main agents of the digital transformation of Brazilian retail, with predominant exposure to discretionary retail and strong sensitivity to the consumption cycle and access to credit in the country.