Spanish food retail group DIA has announced that it will close 343 stores and three warehouses in Brazil following negative results for its business in the South American country last year.
DIA is betting on divestitures to reduce its net financial debt, which shrank 22% to €422 million at the end of 2023 from the prior year.
The aim is to direct the group's resources towards more profitable markets with better growth potential such as Spain and Argentina, DIA said in a filing to Spanish stock market regulator CNMV.
Focus On São Paulo
In a statement, DIA said that it plans to focus its activity in the São Paulo area, where it will continue to operate 244 stores.
This will ensure that the 'business has greater profitability and the concentration of stores allows it to capitalise on the logistics network and reduce costs', it noted.
'These measures will allow resources to be allocated to the most profitable markets with the greatest growth potential for the group, Spain and Argentina, where the company has currently achieved a relevant position with a strategy focused on local food distribution.'
Brazilian Operations
DIA began its business in Brazil in 2001, where it currently has around 600 stores.
It posted a loss of €154 million in Brazil in 2023, more than twice that of the €72 million loss the year before, due to strong competition that led to large promotional investments, it said last month.
Last August, the retailer announced it would leave Portugal by early 2024, selling nearly 500 supermarkets there to Auchan Portugal for €155 million.
Additional reporting by ESM
