Casas Bahia: Heir returns to Itaquera and expands logistics – 08/19/2023 – Market

Amidst the fight with his brother over the inheritance of the founder of Casas Bahia, businessman Michael Klein returns to the cradle of the giant retailer with the transfer of his office to São Caetano do Sul (SP), accelerates the sale of his dealerships in Lula’s program discounted cars and is getting ready to enter the logistics warehouse market in the east zone of São Paulo.

As of this month, already reinstalled at Casas Bahia’s original address, in the ABC region —where the retailer was born about 70 years ago—, the businessman will begin the expansion of the CB Group’s logistics projects, a holding company with 500 employees and real estate businesses and 11 car dealerships for the Jaguar Land Rover, Honda, Mitsubishi, Jeep and Mercedes-Benz brands.

The return to São Caetano also represents an outcome in the pretense that the businessman once had to work in the airline industry. He embarked on aviation after selling control of Casas Bahia to Grupo Pão de Açúcar in 2009, when the chain merged with Ponto Frio to form Via Varejo.

Out of business, Michael left the retailer’s hometown in 2018 to settle at Congonhas airport, in São Paulo, when his Icon Aviation air taxi operation was taking off.

The executive aviation arm, however, became unfeasible in the pandemic due to the dollarized costs of aircraft maintenance and was sold in 2021 to another company in the sector, Voar.

“Today, when I need to travel inside or outside Brazil, I rent the aircraft I sold from them. We didn’t want to have a pilot or anything anymore. I never learned to fly, I never even sat in the front seat of the aircraft. I always wanted to be a passenger” , says Michael.

Since then, he has occupied an office with 110 employees in the Moema neighborhood, where he assisted the reporter for an interview at the end of July while the moving team was still preparing to remove the piled up boxes.

There he spoke of his next business step, in the east zone neighborhood famous for housing the stadium of his football team, Corinthians — a model of the arena, which adorned the old office, was duly transported to the new premises.

The first shed it will launch, called Itaquera 1, is 10,000 m^two and investments around R$ 50 million. Next, there are plans to build two other developments of the same size.

Michael, who already has logistics operations in the municipality of Cajamar (Greater São Paulo) —known as “the Faria Lima of warehouses”, for concentrating some of the main distribution centers for online commerce in the country—, wants to make Itaquera “the Faria Lima of urban sheds”.

The advantage of the neighborhood, he says, is that the location within the capital of São Paulo streamlines the so-called “last mile” (in English, last mile, which designates the last stage of delivery, which needs to be fast, cheap and efficient).

The businessman also plans to start, in March of next year, the earthworks of his second warehouse in Cajamar, with 800,000 m^two of land, 250,000 m^two of built-up area and investment of more than R$ 1 billion.

Most of the income of Grupo CB’s real estate arm still comes from renting stores to Via (owner of Casas Bahia). But the new warehouses can be leased to other segments, from food and apparel to electronics, diversifying revenue.

In the automotive sector, the group’s portfolio is more geared towards brands in the luxury segment, but it also recorded an acceleration in part of sales with the Lula government’s discount program for so-called popular cars of up to R$ 120,000.

He claims that the 20 units of the Jeep Renegade model that were in stock at Grupo CB dealerships were sold in two days.

“It would take months for the cars to come out. After it was stretched a little further, we received another 20 cars and they were also sold in a very short period of time. In our case, it had a positive effect”, he says.

The businessman avoids making more direct assessments about the first half of the PT government.

“I wouldn’t like to comment on politics. Every politician wants to do the best. That best can take a while to arrive. Let’s wait for better days. We hope that the government gets the measures right so we can start taking off,” he says.

Upon his return to the retailer’s old building (located at the address that bears his father’s name, Rua Samuel Klein), Michael should be greeted with tax incentives offered by the City of São Caetano. Despite the welcome, the environment he will find has been modified by the reputational crisis that has hit the family name in the last two years.

In 2021, a group of councilors from São Caetano made a petition to try to change the name of the street that honors Samuel after the release of several reports on lawsuits with accusations of sexual crimes.

The reports that shook the reputation of the founder of Casas Bahia (who died at the age of 91 in 2014) came to light after the revelation of the rape accusations involving Samuel’s other son, the youngest Saul, now 69 years old, Michael’s brother ( who is 72 years old).

The councilors’ attempt to rename the street did not succeed, but the tension between the Kleins should continue on other fronts. In the fight between the brothers, Saul contests the division of the billionaire inheritance by presenting suspicions of forgery of his father’s signatures in documents that benefited Michael.

The brother, in turn, denies that there was fraud. He says that the will drawn up had witnesses, lawyers and notary clerks. “A person over 80 doesn’t write as firmly as they did 10 or 15 years ago,” says Michael.

In response to the graphotechnical reports taken by Saul’s lawyers to the police to request the opening of the inquiry, Michael also demanded an expertise of the firms that appear in contractual alterations of Casas Bahia and in the will.

The result obtained by Michael at the end of July concluded the opposite, indicating that the signatures are authentic.

Sought after by the report, Saul’s press office claims that the lawyers are prevented from expressing themselves publicly because the Justice decreed secrecy in the inquiry that investigates the forgery of signatures in documents involving the estate of Samuel Klein.

In a note, he also says that Saul’s defense “is unaware of the existence of the alleged report prepared by Michael Klein”.

It is not the first time that Saul has questioned the authenticity of signatures in a legal dispute. In 2019, a woman sued Saul, accusing him of failing to pay the agreed installments in an agreement for the provision of model and caregiver services, but he denied it, arguing that he was unaware of the existence of such a document and that he had never signed it. According to graphotechnical expertise carried out at the time, the signature attributed to Saul was false.

Asked by Sheet if he feels sorry for Saul for having taken the family’s surname to the sex scandal news, Michael says he regrets that his brother did not follow the path of protecting the name.

“Each one chooses the path they want to follow in life. I decided to follow the path of starting a family. It is not the same as he chose. So, he must bear the consequences of the path he decided to follow”, says Michael.

In addition to the family dispute, Michael faces a dispute with Via, currently in arbitration, over the agreement signed for the payment of old labor liabilities.

Since he resumed his position as the main individual shareholder of Via Varejo in 2019, the Klein family (including Michael’s sister and the businessman’s children) has owned more than 20% of the company and today his son Raphael occupies a vacancy on the board of directors.

When moving to São Caetano, Michael took, in addition to the model of the stadium, the book that celebrated Corinthians’ 100th anniversary in 2010, a special edition with more than 600 pages in 30 kilos of historical photos and tributes to the team.

An enthusiastic Corinthian, the businessman insisted on showing the publication to the reporters of Sheet before starting to talk about business, politics or family conflict. When opening the cover, he shows the autograph of the star player Sócrates and warns, good-humored: “True signature!”.