As chief executive officer, Cristina Betts is the first female to head Iguatemi S.A., which specializes in mid-tier and luxury shopping centers in Brazil. The company has equity in 14 malls, two premium outlets, one power center and three commercial towers, and is listed on the São Paulo Stock Exchange.
Having previously served as chief financial officer, Betts succeeds Carlos Jereissati, making her the first non-family member to run the company that dates back to 1966.
In a recent interview, Betts spoke about how Iguatemi has weathered the pandemic and is maintaining consumer connections. From her viewpoint, after a few years of a recession and two years of the pandemic, the company is seeing an “incredible bounce back” with some tenants posting double-digit and even triple-digit sales increases compared to 2019 and mall foot traffic is also up to pre-pandemic levels. After Brazil’s three-month lockdown in 2020 and one-month lockdown, people were eager to be together and “nobody could stand to be at home any more.”
A recent poll of nearly 100 private economists by the Brazilian central bank reportedly indicated that the economy is expected to improve this year and also see a 1.51 percent GDP expansion this year. Inflation is expected to wrap up this year at nearly 8 percent and next year the forecast for inflation is 5 percent.
“I know the world is a little more complicated in terms of economics and so on, but May numbers [showed] a 36 percent increase in sales versus May 2019,” she said.
For the second quarter in a “preliminary, non-audited document that is subject to later review,” Iguatemi reported total sales for its portfolio increased 30.2 percent, reaching 4.3 billion reals, or $790.4 million. Eight malls grew more than 30 percent in the second quarter compared to the same period in 2019. The company’s tenants are said to have seen same-store sales climb 31 percent compared to the same quarter in 2019. In terms of performance by segment, apparel, shoes, leather goods recorded a 51.2 percent gain versus the second quarter of 2019.
Iguatemi has unveiled Apartmento JK, a Marilla Pelegrini-designed space to welcome and entertain VIPs. The “Fashion Therapy Room” in Iguatemi 365 store in São Paulo has also bowed and is led by stylist Antenor Neto. The company continues to stage pop-up events in leading holiday destinations like Trancoso, Brazil.
While luxury brands and jewelers have performed well, especially at the start of the pandemic, supermarkets and sportswear brands have also gained ground with shoppers whose lifestyles have changed. Now everyone is doing well, especially Brazilian brands, apparel and restaurants, the CEO said.
Here, Betts talks about Iguatemi’s recent performance, the makeup of its malls, and being a female CEO of a major company.
WWD: What about concerns about a recession, shipping issues and the war in Ukraine? In the U.S. and in Europe, people are becoming much more tentative. Is that not happening there?
Cristina Betts.: Yes, it’s happening. Twenty to 30 percent of our portfolio is international brands, not only the luxury brands. But 70 percent of the brands are local and source locally. A lot of international brands also source locally. Part of the shipping problems involve shipping from Asia and Europe, but it still hasn’t affected our numbers. It’s not that we aren’t concerned. There are issues of course with receiving inventory and also not only a recession in Brazil but globally [as seen in] hikes in interest rates and inflation. I know the rest of the world is very concerned about inflation. We are also concerned but we have lived through worse.
WWD: What’s causing the shift in consumer behavior in Brazil?
C.B.: The pandemic accelerated the shift. We cater to a middle to high-end consumer. We have the flagship malls in São Paulo, Campinas…and various parts of the country. With this mid to high-end, the conversion is higher. During the pandemic, that was kind of natural because all of the [other] leisure options were restricted. [Not so for] being at the shopping mall and consuming, whether that be a product, service or going to a restaurant. From now on, I think a lot of consumers are going to buy a lot more locally than buying elsewhere. They’ve figured out it’s easier and basically the same price as buying stuff from the U.S., Europe and so on. We’ve also upgraded the restaurants, which cater to breakfast, lunch, dinner, afternoon snacks or a glass of Champagne at four o’clock in the afternoon.
WWD: There’s been so much discussion about the death of malls. How do you see things changing with shopping malls?
C.B.: I’m biased [laughs]. The truth is it’s fantastic that you have convenience online, but people live offline, hopefully. My 11-year-old is on Roblox everyday meeting her friends after school. But she much prefers to be with them at school or at their houses playing together. Malls in Brazil have always had a very different configuration than other parts of the world. They are very much a place for meeting. People’s everyday lives revolve around the mall. They have lunch here everyday. They go to the movies here. They shop here for [everything from] the Gucci handbag to school shoes for their kids. It really is a one-stop shop for everything and is smack in the middle of the city normally.
WWD: Shoplifting and organized retail crime have become more of an issue in certain countries. Are you seeing that increase?
C.B.: One of the things we always think about in our malls is, “How do we boost security?” We have an intense security system, personnel people at the doors, cameras monitoring all of our corridors and main tenants. Over the decades, one of the things that has happened is that there aren’t a lot of fancy street retailers in Brazil because of security. Luxury tenants chose to migrate from street retail to the mall because it’s safer. It’s always been a concern for us. It hasn’t really changed. If there are going to be public movements going through the city, we are always very prepared for this sort of thing.
WWD: Have you changed any of the safeguards during the pandemic?
C.B.: No, we have different moments, where we boost security depending on what’s happening in the country or the city. We’re moving into an election year. Typically you have a lot of movements that go by our malls and we will have different types of procedures during them. But that’s a normal part of our routine already.
WWD: Are you changing the way you operate due to the recent shooting in a Copenhagen shopping center (which killed three people) and those types of incidents?
C.B.: Brazil has always had a different type of scenario than other parts of the world so we have always had a different kind of configuration for security. We always have to look at our country and see how we work within our country.
WWD: Where are the greatest opportunities?
C.B.: We were the first company to IPO in our segment in Brazil in 2007. From then up until 2015 or 2016, we grew a lot by building out new malls and expansions. In this next decade, our biggest opportunity is in M&A….When you think about how Uniball bought Westfield or Simon [Properties] is a big consolidator in the States, nobody’s played that role in Brazil yet. We only own about 64 or 65 percent of our own portfolio so there is a lot of minority interest that we can look to buy within our portfolio and then think about consolidating other assets. It’s not that we’re never going to build something new. I think it’s going to happen, but maybe not at the same speed that we used to do in the past.
WWD: Are there any areas that you are looking to invest in or take a stake in?
C.B.: We are a mall owner/operator. We own these assets that are the mid, high-end malls in each of their given locations. The idea is that we do more of the same at different locations. We look at increasing participation in our assets but not going too far from where we are.
WWD: How has the investment in Etiqueta Única played out?
C.B.: We have our own marketplace Iguatemi 365 that is a digital shopping mall. Etiqeta Única has two angles — one we are moving toward a more digital omnipresence. We want to leverage what we do well in the physical world and take that to the digital world, which is why 365 has the same kinds of curated products and brands that we have in our malls. Etiqueta Única has the same feel but also something that is very new to us — secondhand. It is the largest secondhand digital store in the country and they cater only to luxury brands — Gucci, Chanel — which fits very well with our positioning. We have a lot of consumers that we think will be suppliers to Etiqueta Única. We also have a very aspirational public here that wants or may be first-time consumers of all these brands. Some want to try them out. Etiqueta Única is solely digital now but we are thinking about how to integrate them into our physical world as well.
WWD: Will that mean brick-and-mortar stores?
C.B.: We don’t know yet but it does make sense to have your customer see the product.
WWD: How do you relay a sense of community when price points are inherently exclusionary for certain classes of people?
C.B.: Yes, we cater to mid- and high-end segments. Not everybody buys Gucci handbags everyday. You are right. We are a full-service mall. You can walk into our flagship mall in São Paulo and the first two stores are C&A and Lojas Americanas, which is where I go to buy candy and drawing paper for my daughters. Our malls have all types of services and stores that cater to all kinds of moments and different price points. But you also have the luxury.
WWD: How does being a woman affect your role in the business world?
C.B.: It is something that I have been increasingly aware of especially now sitting as CEO of the company. I didn’t really think about it when I was a lot younger. For me, it was very important to make sure that I did what I had to do well and that I had my own voice. I’ve been very lucky that I’ve always had fantastic bosses that have given me space to work with. But I do realize there is a difference. Iguatemi has always been a heterogeneous environment where there has always been a lot of diversity. When I joined 14 years ago, half of our executive committee was women. Today it’s still half but if you look at the top management bracket from directors up, 46 percent of our executives are women. It’s already very gender-friendly and other different categories. People will think, “Ah, because you’re in the fashion world.” But I was the CFO of the company for several years. Maybe not the typical boy that you would imagine, right?…We want to make sure that our company has the same kind of availability and diversity that we have coming through the doors of our business everyday.
WWD: What might non-Brazilian people not know about how business is done in Brazil?
C.B.: Brazilians are very light in their approach to things. We are serious about what we do but everybody carries a good sense of humor. It’s true. We like having a light environment. We’re not very bureaucratic or heavy about processes. But it doesn’t mean that we’re not serious about what we do. We are very serious and very committed to the things that we do. It’s just that we do them hopefully having fun as well.