The Market for Fashion IPOs in Brazil Heats up

This month’s Fashion Friday podcast series by Euromonitor International analyses why the Brazilian fashion market faces such a high number of IPOs in the industry, even amidst COVID-19.

Despite Brazil’s weak economic growth since 2014, the financial market expected 2020 to be a year of recovery. This positive outlook boosted the number of IPOs planned for the year ahead. Many IPO processes were kept even under the unpredictable scenario of the pandemic in all sectors in Brazil and the fashion industry has been seeing a dynamic pace of new entries in the stock market.

The strong impact of the pandemic in Brazil’s fashion companies’ stock is putting their results amongst the worst performers. However, Brazil has witnessed record levels of new investors looking for more profitable options of investment – from March to June, more than 900.000 new investors debuted. IPOs benefit Brazilian companies’ growth as they help gain a competitive advantage over international players, especially during the pandemic, when they are struggling to export their products to Brazil and other markets.

Euromonitor International expects the market to see a strong consolidation led by the most powerful fashion groups. This may result in reduced visibility for artisanal, conceptual and design-oriented players, which may force companies to favour fast-fashion over sustainable fashion. However, there will also be plenty of opportunities available for companies to invest in research to accurately understand market trends that will be suitable for consumers.

The Brazilian fashion industry’s IPOs momentum can support a fiercer competitive landscape where companies have the possibility of gaining more well-defined market positionings, resulting in more interesting offers to consumers.

Written and created for FashionUnited by Euromonitor. Explore a variety of fashion-related podcasts by Euromonitor here.

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