Farm Rio Sale in Preparation, Says Azzas CEO

What is happening with Farm Rio's sale process?

Azzas 2154 CEO Alexandre Birman confirmed on Thursday (August 13) that the potential sale of the Farm Rio brand is in a "preparation" phase. Morgan Stanley is leading the process, which could result in a full divestiture or a new investment partnership for the brand.

Why does Farm Rio need a new investment cycle?

Birman stated that Farm Rio has posted strong growth in recent years but has now reached a stage where it requires a fresh round of investment to continue expanding. The group believes a new capital cycle is necessary to unlock the brand's next phase of development.

What is going on inside Azzas 2154's management?

Birman acknowledged differences with co-founder Roberto Jatahy, former CEO of Grupo Soma. A dedicated team is working to resolve the corporate governance issues between the two partners, allowing management to refocus on Azzas's day-to-day operations. Birman described a "very strong sense of urgency" surrounding the company.

Why did revenue fall in Q2 2025?

Gross revenue reached R$ 3.4 billion in the April–June quarter, a 7.1% decline compared to the same period in 2025. The main drag was a 13.6% drop in sell-in channels (franchise and multi-brand wholesale). The company deliberately delayed the delivery of its Summer 2026 collection to franchisees in order to reduce bloated inventory levels in the shoes and bags segment.

What is Azzas doing to fix the inventory problem?

The company is prioritising the stabilisation of franchisee stock levels, which had built up due to weaker consumer demand. Management expects the shoes and bags segment to normalise within the next few quarters. Gross margin, financial cycle and cash generation were highlighted as the quarter's bright spots, while revenue, expenses and EBITDA margin were the weaknesses.