Read this Tuesday’s edition of the FolhaMercado newsletter (18) – 07/18/2023 – Market

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H&M in Brazil in 2025

The Swedish H&M, fashion retail giant and one of the main fast fashion brands, will land in Brazil in 2025, the company informed this Monday (17).

• The country is the main market in which the company had not yet set foot in Latin America.

• It arrived in the region in 2012, with the opening of its first store in Mexico. Today, it is also in Peru, Uruguay, Chile, Colombia, Ecuador, Guatemala, Panama and Costa Rica.

The Brand: H&M is one of the great competitors alongside the Spanish Zara and, more recently, the Chinese Shein in fast fashion. The fashion segment is characterized by high turnover of collections.

• The sector was turned upside down by the Asian retailer, which uses its algorithm to identify pieces that are hits with consumers much faster.

In an investor presentation seen by the Financial Times, Shein reported projected annual revenue of $58.5 billion in 2025, up from $22.7 billion last year. The figure would surpass the combined annual sales of H&M and Zara.

H&M’s challenges in Brazil: the Swedish brand will have to prove that it will have a different end to other big fast fashion retailers that came to the country and already left.

This is the case of the Spanish company Mango, which left Brazil in 2013 and returned this year at the hands of Dafiti, and the American company Forever 21, which closed its stores here last year, eight years after having landed.

Among the obstacles that motivated the departure of these companies and that will now be faced by H&M, are the high costs and bureaucracy to operate in the country, also known as “Brazil cost”, in addition to competition with Asian platforms.

One of the companies most affected by foreign competition is the Brazilian Marisa, which completed its restructuring plan this Monday, with the closing of physical stores, cutting costs and renegotiating debts.

• The fashion retailer’s shares closed up 8.86%. In the year, the paper accumulates a drop of 31.2%.

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Taylor Swift becomes the talk of the Fed

Taylor Swift’s “The Eras Tour” was cited in a Fed document as a stimulator of Philadelphia tourism.

Understand: the comment came in the so-called Beige Book, a report that summarizes how different parts of the economy are behaving in American cities.

“Despite the slow tourism recovery, May was the strongest month for Philadelphia hotel revenue since the start of the pandemic, largely due to the influx of guests during Taylor Swift’s concerts in the city,” says the document.

In numbers: started in March of this year, “The Eras Tour” has shows scheduled until August 2024 and has already collected more than $300 millionwith average ticket prices of more than $250, according to concert tracking group Pollstar.

• The projection is that the concerts that bring together the 20-year career and the 10 albums of the singer will generate revenue of US$ 1 billion, with more than 130 presentations on five continents.

It is not the first time that Swift’s tour is the subject of economic commentary.

The American credit consultancy CreditSights pointed out that US hotels register a significant improvement in financial results with the singer’s performances in their cities, showed the Financial Times.

In Brazil, the singer will perform six concerts —three in Rio de Janeiro and three in São Paulo— between the 17th and 26th of November. More than 300,000 tickets were sold in the country, with prices ranging from R$ 190 to R$ 980. There was also the sale of VIP packages that cost R$ 2,250.00.

another american singer who was cited by a bank in its reports was Beyoncé.

Economists at the Danish Danske Bank said that May inflation in the country came in above expectations because of “the fault” of the start of the artist’s world tour that month in Stockholm, which caused a rise in hotel prices.

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Operators rethink ‘Unlimited WhatsApp’

The offers of the three main operators in Brazil —Tim, Vivo and Claro— of unlimited and free access to some applications, including WhatsApp, may be close to the end.

The message was given by the companies’ executives, who are in a process of heavy investment to promote the connection to 5G networks to their customers in the country.

Understand: to guarantee access to some apps without spending on the data plan, operators assume the costs, as a way of attracting customers, or end up charging the application providers.

Why it matters: the service leveraged the sale of plans in the country, where 62% of people access the internet only via cell phone. The main use of the device around here is precisely the exchange of messages via WhatsApp, according to the TIC Domicílios survey.

What each carrier offers “for free” to customers:

• Tim: grants free access to WhatsApp and Deezer on pre-paid and post-paid plans, which also include unlimited Instagram, Facebook and Twitter.

• Clear: offers plans with unlimited access to WhatsApp, Waze, Instagram, TikTok and Facebook.

• Alive: it is the one that least offers unlimited access to apps. The company’s customers have unlimited access to WhatsApp only. Some postpaid plans include Waze.

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End of grain deal between Russia and Ukraine

The end of Russia’s participation in the agreement that freed the ports of the Black Sea for the export of Ukrainian grains could have an impact on global food prices.

Understand: the two countries reached the pact in July, after intermediation by the UN and Turkey. This Monday, Russia said it will not renew its participation that guaranteed the flow of more than 32 million tons of Ukrainian food.

The country has an important participation in the export of sunflower, corn, wheat and barley. The prices of these products rose at the opening of the market on the Chicago Stock Exchange, but closed flat.

Hours before the Kremlin left the agreement, a bridge linking Crimea with the country was attacked for the second time by Ukraine. Russia said the decision was unrelated to the attack.

Why it matters: when the agreement was signed and grain shipments resumed, world food prices fell by about 20%, according to the UN Food and Agriculture Agency (FAO).

• At the start of the war, commodity prices soared both because of territorial barriers imposed on Ukraine and Western sanctions on Russian exports.