Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to the conference call of Via Varejo to talk about the results of the second quarter of 2019. This event is being broadcast via webcast, and it can be accessed at www.viavarejo.com.br/ir, where you'll also find the presentation. The slide selection will be managed by you. There will be a replay facility for this call on the website. The company's press release is also available at its IR website. This call is being recorded, and all participants will be in listen-only mode during the company's presentation. After that, there will be a question and answer session when further instructions will be given. Should any participant need assistance during this call, please press star zero to reach the operator.
Before proceeding, we inform that forward-looking statements made during this conference call about Via Varejo 's business perspectives, projections, and operating and financial goals are based on the beliefs and assumptions of the company's management, as well as on information currently available. Forward-looking statements are not guarantee of performance. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry, and other operating factors could also affect the future results of Via Varejo and could cause results to differ materially from those expressed in such forward-looking statements. With us today, we have Mr. Roberto Fulcherberguer, CEO of the company, and Mr. Orivaldo Padilha, CFO and IRO. I now turn the floor to Mr. Roberto Fulcherberguer.
Good afternoon, everyone. First, thank you very much.
I would like to thank you all that are participating in our call. Thank you for being interested in our company. I also would like to say that I have here with me all the executive members of the company. I have here with me Sérgio, Abel, and Alysson. At the end, if we have specific questions, they might address those questions as well. We'll be talking about the figures. We'll answer questions regarding our figures. I would like to start on this first call to do it differently. I would like to talk a little bit more about our business, about what we found here, our first impressions, and what we are already doing at Via Varejo. I think this is very much in line to what you would like to hear as well.
First, I would like to say that I am very, very happy for having taken over this company. I am fully motivated to lead the restructuring process for this company. I'm taking over a company that has in its DNA to serve well its customers. It is true that in the past few years, not necessarily that has been the case, but this is in our DNA, really. This is in the company, we are going to resume that very quickly. I also would like to say that I have full approval or a blank card from the board for me to put together a team as I believed I needed. In fact, I was able to come up with a team that I really wanted. Today, we are an executive board that is united and very much focused and determined.
We are not wasting energy on something differently from working on retail and changing, turning this company around, and we are very much focused. We will turn Via Varejo into a light, agile, and transparent company. We have already started this transformation. We want to be the best experience for consumers. Whatever the platform consumers want to relate to us, the consumers will decide how to relate to us at every moment, and it's up to us to provide them the best experience possible. I have no questions that this is going to be a winner's game for those that have the best relationship with the customer. This is already in our DNA. We are going to create and improve the tools and all the ecosystem so that we can bridge this relationship. We have taken over a very strong company.
In despite of everything that has happened in the past year, this is a sound company, and this is the largest retail company in the country. We have a lot of work to do ahead of us. We have many challenges, and we have a lot of work in the different areas of the company. I can assure you that we have already started to do what needs to be done and that we are back to doing retailing. I will show you now what we have found and what we have done in the past 50 days, more or less the period of time that we have been here. On page number three, I will go through our history. You follow up Via Varejo for a while now, but I think it's important to highlight some of the topics in our history. We do have a timeline here.
Between 2009 and 2012, we had the merger between Casas Bahia and GPA. We started Via Varejo, it starts with some corporate issues. Under my point of view, there was a strategic mistake at the time, and that has to do with what we see today, which was the separation between On and Off. This was not a consensus, in fact, that was what happened at the time. I think that has caused delays and problems that we have today to be faced. From then on, starting in 2013, 2012, actually, we started Via Varejo. What we see, especially starting in 2013, is that this company has a low level of attention to core. We tried to implement a model of other types of retail into electro-electronics retail. From what we see today, this strategy proves not being very good.
There was a wish to centralize decisions on the controlling shareholder. Some areas of Via Varejo were running within the controlling shareholders, and that created a retail that is very bureaucratic and not as agile as a retailing operation needs to be. We had a reduction in our headcount, around 20,000 people, and this is part of what we inherit. We have a large volume of liabilities and labor provisions that we will have to deal with and solve. Between 2013 and 2019, the company had five different CEOs. This is not something common. It proves things were not going right, and for each new CEO, there was a new direction to the company. It's difficult to look at a company that changes CEO every year, and not necessarily this was the best decision for the company's core and the best one for our consumers.
Very short-term definitions, looking at the revenue needs of the company and so forth. In the past three years, the company has then put to sale. They came into the conclusion that the separation of On and Off was a mistake, and On comes back to the business, which was Cnova, and Cnova was then fully reintegrated to the company on June 1st, 2019. Considering the figures of the company were not good, we ended 2018 at a loss and the company was not at a good trajectory. Michel Klein led a movement along with other funds, and he invited me to participate the process. I went out in a road show with different places, showing our case, showing where the company was and what we could do for the company if the company were to be managed with a retailing direction.
The funds believed in our case. On June 14th, there was an auction in the stock exchange. The controlling shareholder shares were provided. Today, we have the family Klein as a majority shareholder and other important funds. This became a large corporation. We are the largest retailer with domestic control. The command is in Brazil. Here, right now, we go back to doing retailing in Via Varejo. On the next page, we have the breakdown of our leaders, of our executive board. I am very happy about the team I was able to bring together. We have a lot of experience here in brick-and-mortar stores and digital. We have a senior team. They are ready. They are the right people to the right places, and we are fully focused on delivering results. I will briefly tell you a little bit about each one's experience.
I took over the company. I have worked in GPA, in Casas Bahia before the merger. I also have worked at Via Varejo in the financial area. Since then, when I decided to leave the company, Michel invited me to take over one of the seats he had on the board. I have been on the board since then. I have been in Arapuã, GPA. All my career was in retail. Throughout this trajectory, I had the opportunity of being in all retail areas. I have a lot of baggage. I feel very confident to take over the challenges we have ahead. In commercial and operations vice presidency, we have Abel. Since we started the process of potentially having this process, he is working with me. He helped me put together this team. He has large experience in retail as well.
When Via Varejo started, I brought him over. He was at the competition. He was going to work with stores operation. He worked with me Via Varejo and GPA, so we have a 20-year relationship, and Abel deeply knows retail. He works brick-and-mortar and online stores, commercial areas, and also on marketing. Padilha is taking over the finance and investor relations vice presidency. He's our CFO and our IR officer. He also has a sound experience. He has all the governance that the CFO needs to have. Also he has deep knowledge about retail. He knows deeply governance and retail, and he's going to help us unlock everything we need over time. We also have worked together both here at Via Varejo as well as in Pão de Açúcar, and so we know each other for a long time. Mr. Sérgio Leme, he is our administrative VP.
He's going to work with logistics, customer service, Bartira, and he has large experience in Pátria under new businesses. He has been a VP at Whirlpool. He has worked in Mexico as well. He knows the other side of the table. He made me work a lot last year, so I want him by my side, as Sérgio will analyze service level and cost all the time. I am sure that he's going to deliver the excellent service level at low cost. Alysson is taking over the digital innovation and HR areas. Why HR under Alysson? Because we do not have the digital area in a company if HR is not with them. This was Alysson's request to take over HR. At that moment, I knew that I had the right person in front of me.
From then on, I had to convince him to take up our challenge. We explained to him exactly what was the project that we had in our hands, our opportunities, and as soon as he understood it, he just embraced the cause and said that he would be with us. He has a huge digital baggage. He was the CEO of Mercado Livre, and he was CEO of Movile Pay. He's here with us for a week only, or actually five days. He was the last one to come aboard. He was already participating on our decisions. Some may ask, but a pure digital person, how can he behave in a retail company with many brick-and-mortar stores? For five or six Saturdays, he has been in the brick-and-mortar stores, and he's really passionate about them. We can see that in his eyes.
He is also very much on board to do everything that we need to do in this company. Once again, I can say that I am very happy about the team I put together. This is exactly the team I wanted. On page five, talking about everyone else that are with us at the different boards. I will only talk about the companies that are new to the company. Several of directors already were there, Executive Operations Director, Marcelo Brito, we know him for a long time. Operations and e-commerce and marketplace, we have Ricardo Saliture. Also, we know him for a long time. He was in Walmart Mexico in the same area. Our marketing and communication with the channel, Ilca. She was with us a while ago. She was a trainee in the past.
She went out to the market, now she's back to our team. Henrique Vendramin, he's back to the company as Commercial Director for the white line. Fernando Gasparini, also, we know him for a long time. He took over supply chain logistics. He has a lot of experience there. HR Director, this is still open. We might have news any time. Roberto is taking over Commercial Planning. Sandra Giamatei is taking over Legal Compliance and Governmental Relations. She has also a lot of experience. She knows a lot about retail, has been in different retail companies, and she knows a lot of the programs that we have here. She's the right person to help us. David Alegria as Finance Treasury Director. He's starting today in the company. He's brand new in the company. A lot of experience as well.
Helio Muniz is taking over communication and institutional relations. He has been with us for 3 weeks. Also an excellent acquisition. He is helping us a lot. In summary, we have a team, again, very seasoned, both in the online and brick-and-mortar stores. The right people in the right place and full focus in delivering results. In the regional directors, we have 6 of them. We switched 4. 2 of them were kept. Of the 4 of them, 2 have been promoted and 2 came back to the company. They were at the competition, and they wanted to come back for this new game. On page 6, talking about what we are and bringing the 2 figures. Today, Grupo Casas Bahia is a leader in electronics and appliances retail in Brazil, as well as furniture with a revenue over BRL 30 billion.
We are among the top five in the global relation with most of our international manufacturers. We are top of mind in the Brazilian market with Casas Bahia brand, and both brands together, we cater to all profiles of clients in the Brazilian society. We have a lot of credibility embedded in our brands. These brands have been side by side, Brazilians, in the good moments and in the bad ones too. Casas Bahia was with Brazilians since the beginning, believing in consumers, providing credit, and credit operations are very relevant for us. We have wonderful banners to move forward. In the omnichannel platform, we have on and off integrated since July 1st, 2019. We have several challenges and problems to be addressed. I'll talk more about them. Here we can look at the glass half full or half empty.
Considering everything that we have at hand, when we address everything that we need to address, we will have a huge opportunity ahead of us with the retail that we have. We have over 1,050 brick-and-mortar stores fully integrated to our apps and our e-commerce. We have the click and collect at 100% of the stores. In addition to that, we have 7,000 pickup points, such as post office and gas stations, over 4,500 sellers, and over 2 million SKUs in our marketplace. A little bit further on, I will talk about our vision on marketplace. Our credit business. Here we have over 5 million of active customers with payments booked, and they are recurrently active in our portfolio. We have over BRL 3.5 billion active in our portfolio and over BRL 10 billion pre-approved credit for over 70 million clients.
We have our own cards, co-branded cards, with a BRL 6 billion portfolio and BRL 11 billion pre-approved. We have BanQi that is just starting, and this is very promising for us. Several partnerships in terms of financial products. Logistically, we have the largest network. We have 26 distribution centers, over 1 million sq m of storage area. We are able to have two deliveries per second today, and 58% of our orders are delivered within 72 hours. Here we have something new. Very quickly, we are switching the figure to 24 hours. Most of our deliveries are done in 24 hours and with a great cost efficiency. We are able to be, and we will be the fastest deliverers and the cheapest deliverers in Brazil. We have several solutions already ongoing, both for recurring customers delivery, and we have news ahead.
Now I would like to talk about our drivers. During these first days and our perceptions on slide number 9. Starting with the physical stores, we found stores that were not flexible. The manager and the teams had some missions that really occupy them for several hours a day. The back office was a little bit held up, and there were some conflicts in the way the team was compensated. It was very much linked to extended warranty. What happened is that they didn't focus on the product sale, only on the warranty or the extended warranty sale, and it should be the other way around. Also in terms of pricing, there was no flexibility. It was very hard for us to follow competitors. Most of the month, we couldn't do that.
At a certain point in time, we had to reduce our prices very steeply in order to resume the level of our sales. During the first Saturday that we were visiting stores, we already changed this metric. That is to say, the manager and the salespeople should no longer stay in the back office answering huge questionnaires. Now they have to be there in the store and guaranteeing that we will continue to have the best service in retail. We had this in the past, and we are recovering this. We already have 50% of the team being trained in the street, and in the next 60 days, we will have the additional 40% already in our cadres, already prepared and going to the field in order to train our team.
Over 400 people in this team. With a major engagement in order to train once again, because we are going to recover the excellence that we had in the past in terms of customer service. We have rated on that. At the stores, I really need to trust the manager, the store manager, otherwise, I shouldn't have this person in the store. The managers can follow already what the competitors do, and they do have this possibility, and we can see at the same moment whether excesses are being carried out or not. You have to solve the problems, but I would say that most of the things are already working. What happened after these changes? Well, we have been feeling this improvement in the level of revenue and also in our margins.
Otherwise, you shouldn't just wait for things to happen and then all of a sudden have a very big change carried out very all of a sudden. Omnichannel, we are focused on having omnichannel in this business. We were able to integrate on July 1st. After that, the client can relate to us or with us the way they want. They can buy at the app and collect at a physical store and/or return the product at the physical store or the brick-and-mortar store, whatever is more convenient. Due to the transparent relationship that we have, we want to have a totally transparent company. I would like to make it clear that we have not yet reached the level of stability that we would like to have. We had problems in our brick-and-mortar stores in July because of this integration.
Intermittently, we were a little bit out or off the air. We still have problems to be solved in our online operation. They are being addressed, and we are stable now in our physical stores, and the online problems are being addressed. We have a task to guarantee the stability of this business and guarantee that next month or the last quarter, we will have Black Friday and Christmas, and we will intend to be totally stable. The consumer will be able to relate with them, and the goods will arrive on time to all customers. Together with that, and while we correct the details, what I'm going to talk about a little bit later, Bartira, our furniture factory. We have a major opportunity to increase our furniture production, and we have the capacity at the plant to do that.
This has everything to do with the increase in our margin and our credit operations. These two things go hand in hand, margin and credit operations. This allows us to increase our market share, increase our revenues, and drive the business as a whole. We are already addressing this. We took furniture with 12%, and we already have four additional points today, and we believe that we can reach 22%, and we intend to stabilize furniture at this figure. In credit and financial services, the idea is to drive credit operations, and we are absolutely sure that we can have more credit, and furniture will help us in this endeavor. Talking about credit lines and billions, but we have already worked with many banks. As the treasury of this was under GPA, our concern was to show our intention for this business.
Banks do understand. They are supporting us. They have understood our position. We have a very good position in this regard, and Padilha will be talking about that later. In BanQi, we are on schedule, 32 stores. In the next weeks, we will have the prepaid card to the plastic, and that is a very important component for BanQi because not in all places in Brazil can we have the reading of QR code yet. We are happy with what we found here. Very frankly, I wouldn't like to go into details here because there is a very big strategy behind all that. I know that our competitors are listening to us, and I wouldn't like to go into details for this specific reason. In terms of people, we have improvements in our business.
In all stores, we started the program, the Volta pra Casa, back home. The people that did not believe in the model that we had in the store, they are no longer with us. Now all the salespeople know that we have established this program and that good salespeople who want to come back and that left the company because they didn't agree with the model that was enforced, they can come back home if they do agree with our model. We are totally focused with energy in order to turn this business around. We are increasing engagement, diversity. We will have a very well-trained team with very good proposals and values in commercial and marketing. We are sitting down at the table with the main industries.
We have already sat down with most of them, in fact, and together with We want to have partnerships and strategic partnerships and represent between 40% and 50% of many of these companies, and sometimes even more than that. It would be nonsense for us not to have a long-term view and a good strategy for the industry. We are going back to that very quickly, and the industry is happy with our return. We have been holding excellent talks, and the industries know that now we have what is said, is done. They know me, and they can give me a call at any point in time if they think, well, we have not complied with what we said. In terms of marketing, we are changing all our communication to multichannel.
We are making many surveys, many proposals going on, and we will not be able to give you details, but a lot of good things will be coming for marketing. We have the program called Leaders for the Future, in which we value our in-house team, and we build a career for this team. The store manager comes from the shop floor and the regional manager as well, and the regional manager comes from operations. In the future, maybe the new VPs and the new CEO when I retire will come from our ranks. This is what we want, and we are driving this, and we are making this very clear to our whole team, all the value that we attribute to them.
In logistics, we are towards the full integration of our business as of July 1st, when we integrated with Cnova, and we are doing the systems integration in order to become more efficient. We have a major capacity to act and to accelerate our deliveries, reducing costs. There are many news to impart to you in the next few quarters, and we will be accelerating click and collect for Black Friday, and the technology and logistics team are already working on that, and we will be able to deliver this improvement for our Black Friday. In terms of technology, here we have a major challenge because we have the integration of the On and Off that has already been done. As I said, we saw a few instabilities, and we are in a quest for stability.
The team is 100% focused on guaranteeing a stable company and guaranteeing that we will be able to run very smoothly with the tools that we have, with some fine-tuning being necessary. Alysson is carrying out a major diagnosis of our technology, and together with that, we will be restructuring this business so that we may have a top technology standard and the relationship with our clients based on that. Back office, we are concluding the administrative separation from GPA. I think we need an additional 20-30 days in order to finish this process. We still have some things related to payroll that runs here and runs there, but top 30 days we will need in order to have a full de-integration, total separation from GPA.
We are carrying out major transformations in our back office and adapting our back office in order to make it lighter, more agile, and more adequate to our core. The back office should serve the stores and not the other way around. We are working for the stores, and we are working for our customers here. Before I close, I would like to leave an additional message with you. We have just signed with McKinsey. Well, the amount of consultancy that the company had in the last few years is incredible, but I would like to tell you why we have contracted McKinsey. We have hired McKinsey to do our RTF, which is our short-term transformation process, in order to help with our digital transformation and also to design our strategy.
The difference between our having this consultancy now and what was done in the past is that this is being focused by the top management of the company, and they will be helping us in the necessary definitions. I am 100% involved in the new drivers that this business will bring us and totally involved in this transformation, which is totally linked with our core, with our customers first and foremost, and of course, with our bottom line and the increase in our profitability for our shareholders for us. Padilha will be talking about some figures now. When we start the Q&A, if we do not have an answer to give you right now, we will look for the answer and we'll come back to you. We apologize in advance if we are not able to answer some questions during the Q&A.
I would like to give the floor now to Padilha, and I will come back during the Q&A.
Hello, everybody. Thank you very much for your attention. I would like to add to some information that Roberto mentioned. One of the things that we did in the first 40, 50 days was to build a direct relationship of the company with our partner banks. Some have been working with the company for over 40 years. In the last six, seven years, this was done directly by the controlling shareholder, and there was practically no direct interaction for the company.
When we took over, we drafted an agenda and we went to all the banks, talking to all the CEOs and all the VPs and the people in customer service, and doing a lot of work in terms of building a relationship with the credit people, the credit assignment people of the company, and the construction of the credit ceilings. It was mandatory for us because part of the contracts regarding debts and refinancing and the fundings in the short and the medium term had not been carried out yet. As Roberto mentioned, the banks are giving us their full support, and we are maintaining our caps, our ceilings with all the banks. We are opening new relationships in such a way that we have already solved our needs for the next year. We will now start discussing the structural part of the company's financing.
It was a very promising beginning. The banks, they believe in the project that we are championing. Talking about the results of the second quarter, you can turn now to page 10. It's a little bit difficult for us to talk about results because we have not really lived the construction of this result. We are only giving an interpretation. It's sometimes difficult to explain some detail. You do have a snapshot on page 10. The company has a total gross revenue of BRL 7 billion, 4.3% less year-over-year. Last year, there was the World Cup. Gross revenue from the stores growing by 1.9%, reaching BRL 5.7 billion, which is good already. A certain stability also in same-store sales with a very slight drop of 0.7%. We start the negative point. Our invoice GMV, 1.6%, a drop.
1.6 billion, a 15% drop. Both in 1P and 3P, and in click and collect and Retira Rápido, there was a reduction in all these fronts. 1P, BRL 1.2 billion, a reduction of 23%, a penetration of 80%. 3P going almost by 50%, reaching BRL 322 million, with a 20%-21% penetration. Click and collect, BRL 26.6. It was BRL 31.9 in the second quarter of last year. Here, there is a point related to product mix that also affected click and collect. As Roberto said, we are not at full capacity yet. Now we can get to full capacity, which means a huge cost reduction for us. Gross profit reaches BRL 1.7 billion, 11% lower than 2Q 2018, 28% of gross margin, a drop of 1.6 PPs. I'll explain why shortly. Adjusted EBITDA has reached BRL 388 million in this quarter, 38.7% below 2Q 2018.
The adjusted EBITDA margin of 6.4% is already under the new format, IFRS 16. The company ends the quarter with a net loss of BRL 154 million and net cash of BRL 1.1 billion. Turning to page 11. We have the drop of the revenue. As I said, BRL 6.6 billion, the consolidated gross revenue, a drop of 4.3%. Brick-and-mortar stores, BRL 5.6 billion, 1.9% growth. The online with a 23% drop, reaching BRL 1.3 billion. This is highly impacted by the online business. Basically in the last month of the quarter, it was impacted by the integration processes between brick-and-mortar stores and .com, Cnova. This process was more intense in the last month of the quarter, that's when we had the highest loss in online revenue. On page 12.
We have more details. Invoice, the GMV, and these are online details. Invoice GMV dropped 15%, BRL 1.5 billion. 1P GMV with 23% drop. That's where we had the fact of integration process in the systems. Just stressing once again, as Roberto said, this integration process of Cnova, the legal and fiscal and the same tax ID number and the whole system, the inventory, logistics, all of that integration happened starting July 1st. Since the prior month was June. All the impact of the process was really more intense in June, and therefore is reflected here in this quarter. Basically, this drop happens in 1P because of the whole integration process and that integration between brick and mortar and online. Now, financial performance. The gross profit of the company on page 13 reaches BRL 1.7 billion, a drop of 1.6 percentage points.
SG&A slightly grow in BRL 1.3 billion, BRL 1,353, vis-a-vis BRL 1,321 for last year, an increase of 2.4 percentage points. This increase is basically a reflex of the loss of around BRL 400 million in the revenue when we compare both quarters. The gross profit basically refers to the loss in sales, and also because we had the end of Lei do Bem, the Osgood. Therefore, EBITDA goes down to BRL 388 million, a drop of 3.4 percentage points because of the reasons we already mentioned. Now turning to page 14. We have the indebtedness of the company from BRL 1.9 to BRL 2.4. The financial debt goes up to BRL 928 million of short terms, all of them. I already mentioned, we are renewing this debt, and our net cash has a drop of BRL 1 million.
This reduction in the net cash of the company basically is because of two reasons: loss in sales, as I have said, and last year, the company had a program to extend payment dates, which was not renewed in this quarter. We had an adjustment here of more or less a 50/50 of this impact and this reduction. Okay, Roberto. These were the financial results.
We now open the Q&A session. Please, we would like you to ask all questions at once and wait for the company's answers. To ask a question, please press star one. Mr. Luis Felipe Buanain from BTG Pactual has a question.
Good afternoon, everyone. I have two questions. The first one is: in the results release, you talked about some systems instabilities that you have found in the second quarter.
My question is, have you been able to identify all these systems instabilities, and which will be the initiatives that we can think of to address them over 2019 and also in the beginning of 2020? My second question is about the inventory level. How do you think that this normalization will happen in the inventory level over the second half of the year? Thank you.
Hello, Roberto. Thank you for your question. About the system instability, we had the impact because of the integration. In the first half of the year, we had an instability that came from Black Friday of last year when we tried to implement some new modules. Now what we really have is stability post-integration of Cnova. I'm being very transparent. This has an impact on our sales for June. We still have some impact on August.
We made a decision of decelerate our website just so that we would not be hurting our consumers. This instability also happened in the brick-and-mortar stores. The impact was lower, but it did have some impact. About the solution, yes, there are several fronts already operating on top of that. We can tell you that we have been more stable in the brick-and-mortar stores, and we are on our way to being more stable in the online channel as well. We have confidence and a great expectation. We believe that we'll be fully stable in the last quarter of the year. About the level of inventory, yes, we have an opportunity here, but we need to have two or three inventory turnovers to get to what we would like to have.
I'm sure that we do have a few opportunities that we'll be implementing in terms of digitization that are going to help us having a better inventory dynamics. We are also remodeling the way we replenish the stores. We are working on the frequency, but there is a timing for everything to happen. As they happen, we will see a difference in the inventory level at which we operate. That's it.
Excellent, Roberto. Thank you so much.
Mr. Thiago Cruz from Itaú BBA also has a question.
Good afternoon, everyone. Thank you for taking my questions. First, Roberto, you mentioned that now the company has more autonomy in the relationship with the industry. Can you share with us which measures are being taken there? How do you believe that you can be benefited? Maybe with better payment conditions, purchasing price offer, product offers, and so on.
My second question is about the online channel. I know you had a few challenges in the e-commerce. Can you go into the details? Which are the main challenges that you have to overcome? Also, if you can tell us a little bit more about the marketplace. You said that there will be news. Can you tell us anything about that?
Thank you for your question. I'm sorry, what is your name again? Anderson? Emerson. I'm sorry. Okay, Emerson. About the relationship with the industry. We cannot be as large as we are and not have any long-term strategic relationship with the industry. If you have that, you have major possibilities in terms of product assortment, of ensuring delivery, replenishment. You can ensure your margin and several other fronts. There is one thing that I should mention.
We were doing something, which was we went out to the industry, looked for a good position, and we had an in-house area that would be fighting with the industry and the small retailers. More than that, a lot of times, this wholesale of ours would be feeding our seller to bring down our price in our own marketplace. This is a strategic mistake. We ended the wholesale area, and we have signaled that to the industry. We are not here to compete with the industry. They are our partners. We have different areas here, and I would not like to go into details, but in the face-to-face, we can do that eventually, because there are a lot of topics that are very strategic to this relationship, and we would not like to disclose. Now, about the online challenges.
I cannot tell you about any specific front. We have several fronts, several challenges. What I can tell you is that, Alysson, after seeing all that, is giving us the confidence that we are on the right track and that we will be very well at the last quarter of the year. Now, about the marketplace challenges and how we see them. I have no doubts that the marketplace is very important to our business. Zero doubts about that. This is something that we are going to encourage. What we will not do is the following. Well, today, it's more or less considered that the more sellers you have, the higher is your share. We do not believe that.
Once you start having sellers that are not aligned to the way you serve customers or sellers that are not really serving consumers, in the short term, the seller is not going to be hurt, but the owner of the marketplace brand is going to be hurt, which is ourselves. No question about it. The marketplace is a great opportunity for us to adjust several categories that are in line to our business and that we do not sell. I am sure that this is a way of providing the best service possible to consumers in terms of assortment. We will want to qualify sellers that work with us. We are starting doing that. We want to make sure that they have a service level that is comparable to the way we serve our consumers. We are going to be very careful about cannibalization.
It doesn't make any sense having a seller that is a cell phone wholesaler in my business. We'll be very careful about cannibalization as well. About eventually you being in the competitor's marketplace. Look, today we have a relative volume in the industry. Considering the volume that I purchase, it doesn't make any sense competing to other retailers. If eventually I have a distributor of an industry that is selling at a price that they should not be selling at, and they're burning their margin, we are going to talk to the industry, and we are going to address that at the origin. Basically, that's what we foresee. Another thing that doesn't make any sense is that today, there is an incentive to some sellers in some marketplaces.
Honestly, this incentive should be a deduction or to zero out commissioning or to generate a fund for that period, a rebate, for instance, for the seller. Honestly, I do not believe that. I don't think this is sustainable. This is just an adrenaline injection that's temporary. It's nice. You close the quarter very nicely. The marketplace is beautiful, but it's very difficult to sustain, to maintain that without having to add money to it. We want to have an excellent marketplace, very present in our business, but with quality.
Okay, Roberto, thank you very much. That's very clear.
Mr. Joseph Giordano from J.P. Morgan has a question.
Good afternoon, everyone. I would like to go back to brick-and-mortar stores and the short-term plan. You mentioned improving the purchasing experience, and I would like to understand from you, how is the renovation strategy for brick-and-mortar stores?
I would say that maybe CapEx is spent up in the past few years. Second question is that we still see some PPs and we saw in the North and Northeast, I want to understand if you have an expansion plan in your mind, if you foresee assets that could be acquired to leverage this expansion. Going back to digital and systems, when we look at the system today, the system standing up and the architecture that was developed for the past two years, do you believe that this architecture is sustainable in the long term, or maybe you need to develop a new system? If that's the case, how long we would need to make that money?
Thank you very much for your question. Okay. The first one is store CapEx.
I'm sure that we have work to be done in terms of renovation of our stores. We do not have that volume yet. We are looking at all of our stores in a strategic fashion to have a better understanding of how we want this model to be. We are also checking what would be the needed CapEx for this renovation. We have many stores that only need water and paint, and other stores need more renovation. We do believe that with water and paint, a little bit of soap, we will be able to address a lot in the middle term. Yes, in the longer term, we will do a deeper renovation.
About expansion, I think our priority right now is to look at the stores that we have and make this huge planning, as I said, and to recover sales in our stores and recover the share that was out on the table for a long time. We want to have more productivity in the stores that we have today. Of course, do we have room to grow and expand? Of course, North and Northeast still have room to grow. We have room to take there and also in other cities that eventually we are not present yet, or we do not have that strength. About the architecture in the system, we will try to make the best use of what we have. If we look strategically to the longer term, we will have to rebuild the business.
Perfect. Thank you.
Mr. Victor Saragiotto from Credit Suisse has a question.
Good morning, Roberto and Padilha and everyone. I have two questions. The first one is about this timing, this improvement. You said it yourself that the company is going back to retail. You have the system instability. When you have the stability of the system and you unlock the sales force and the stores. Can you give us more information how much of this improvement we should see and when we will see that? Also, I would like to understand a little bit about the past vision. That the store in the past was quicker and digital was more challenging. What about now? The second question about the opportunity that you see in furniture. It seems to be relevant, right?
Maybe out of 12% of the sales, and you're talking about 22% of sales, if I'm not mistaken. I want to understand where this is coming from, if there is in fact a change in the type of products that you are offering, if this was not as well considered in the past, and I would like to know more about that.
Thank you for your questions. Well, we want to do it as fast as possible, but we know that we have a lot of challenges ahead. I don't want to provide any guidance here, but I think we have a third quarter in which we have an improvement, but maybe not in sales, but in our margin. We see improvement, we show signs of improvement, and that's our expectation. For third quarter, I would like to have an improvement.
Fourth quarter, actually, I would like to say better margins and better sales. Starting next year, we would like to follow improving in both fronts. This is a huge challenge ahead of us, these third and fourth quarters, especially the third one, considering the instabilities. Not only in the system, but also we are changing, we are moving the whole company. There's a lot being done, but we have that sense of urgency whenever possible. About the brick-and-mortar stores and online stores turnover. Yes, in fact, it is quicker to turn the brick-and-mortar stores. In the digital channel, this is more difficult. We'll be doing it. We are going to focus. We'll be fully focused because we need to unlock digital as fast as possible. We want to be in the market in the last quarter. Now, about furniture.
I think this company made a decision at a certain moment to stop selling module furniture. We are selling planned furniture. That's not our core, to sell planned furniture. It went back and forth in the strategy in the past seven years. It was back to selling module furniture. Today we have Bartira, the largest furniture factory in Latin America. How am I going to do that? I have to focus on furniture selling, and I have to remodel the assortment, and I have to expand this assortment as needed. I have a factory capacity in Bartira to do that. In addition to Bartira, we also have other supply options, and we'll get this mix right, and we'll be able to boost sales.
Great, Roberto. Good luck and success for all of you. Thank you.
Mr. Richard Cathcart from Bradesco. Good afternoon.
First, about your relationship with suppliers. Your strategy of negotiation is quite clear. I would like to know if we should expect some impact in terms of deadlines, et cetera. The other one has to do with the Extra brand. How is this going to work vis-à-vis GPA?
Thank you for the question. What we have today is the following. Today, our inventory is supported by the industry. We have a deadline for payment depending on the level of inventory that we have. This is supported. Of course, there are no free lunches and there is a cost associated to that. Our wish is to make this inventory remix more agile. However, you have to do this only after you turn over the inventory once or twice, or two times or three times. We will only be able to see this more clearly at the beginning of next year. This would be more clear at the beginning of next year. Regarding the Extra brand. Of course, this is a strategic business, and I believe that this brand is important for the GPA.
At some point in time, we will be trying to sit down and discuss the valuation of this brand and the potential sales in the future. We are going to do the valuation and sit down and talk about it.
Thank you. Mr. Gustavo Medeiros from UBS.
Good afternoon, everybody. Thank you for the question. I would like to go back to the systems architecture question. For the end of this year, or maybe up to December, let's say, I understand that your intention is to stabilize and turn over the inventories, but how long would it take for you to recreate the systems architecture? It seems it's clear that it's going to be in the long run. However, can you quantify that?
Will you be running on the new system, let's say, in 2020 already?
Thank you for the question, Gustavo. There is a legacy for us to use, and what we expect to do is to give stability to it, and that this legacy will be with us too during the transformation. It's not going to be in one year time that we will have a totally new system. The market usually works with something like three years to carry out this task in a company such as ours. We do have the target here to do this in less than two years. This is our target. The advantage of having the situation such as it is because we are going to have new technologies. We will start already with new technologies. We can do it faster because the technology has improved a lot.
Our situation will be better than our competition. We want to transform this business in terms of technology at the world level.
Regarding the third and the fourth quarter, and together with the discussion about the inventory, you talked about turning it over for two, three times. I don't understand why the margin should improve in the third quarter already. Is it because you are very confident about your stores already, and you already work with the new system and a better pricing situation for the salespeople? If you need to turn over your inventories faster, you will have to carry out promotions in the short run. I understand you have some instability in the system, I believe that you're not going to have such a good performance in the third quarter yet in relation to the margin.
Well, if you want to do retail right, it is easy and complicated at the same time. We see Via Varejo with all the stores being locked up, so to say. You can get a good margin for 10 or 15 days in one month. Overnight, then you start not selling, and then all of a sudden, you reduce your margin all of a sudden and very steeply for all categories. This imbalance makes you lose margin. When you have a management in which the store has the degree of autonomy and starts this way already, then we can have the first 15 days, which are stronger, already unlocked, let's say. You will not see the need to all of a sudden hinder your margin in the second part of the month.
Having this commercial strategy in place, it's a very big competitive difference that we have in our DNA. At the end of the day, the fact that I'm more competitive at the store will bring me a better margin. The fact that I work and I gain margin every single day already shows us that we can increase our margin. Of course, all this financial margin brings us a better margin overall.
What about your credit business? This is a second question. In the last few years, the previous management said that they were interested in having a bigger penetration and seeking this in order to increase profitability and to increase sales. So far, this target has not been achieved. What are you going to do differently now?
I'm not talking about the BanQi only, because I believe there are many other things adjacent to that. What about the competition in terms of the fintechs and the access that consumers have to fintechs? Does it hinder you and to which extent?
The credit strategy is very much linked to category. The two things go hand in hand. When I say that I'm going to drive furniture, and in the past, it was exactly the opposite, and then this came back and then went off again. If you have consistency in that, if you do things right and with all the necessary synergies, the immediate effect is to drive furniture and driving as well our credit operations. This is one of the tools that we will be using.
Furniture certainly will be a credit driver, there are many other tools that we know how to use and how utilize in order to drive our credit operations.
Thank you.
Thiago Bortoluci from Goldman Sachs.
Good afternoon, everybody. The first question has to do with your guidance. Are you going to keep the guidance? Which of the areas you think is the most challenging? Regarding margin, how should we think about the balance in this positive trajectory offline and with your investments online?
The interpreter apologizes because the sound is distorted here. Well, your question was not clear, the company says. Your first question has to do with our guidance. Is this the gist of your question? We could not understand it, says Roberto.
In the first half year, we already see very clear the situation of the guidance for the year.
This means that we are revising the guidance. As we have it already revised, we are going to publish it to the market. The second question, we apologize once again, but we cannot understand your question. The sound is very bad, says Via Varejo. We imagine that there will be a margin gain consolidated into our business because if I carry out this long-term strategic negotiation with the industry, it does make sense for us or our company as a whole, achieving margin gains. I cannot tell you one specific figure, but it does make all the sense.
One thing that is important and that should be mentioned is that we have no doubt that the stability of our business in the very short run comes from the physical stores, and we are going to correct very quickly everything that must be corrected and achieving our cruising altitude very soon, generating better margins and stabilizing this. On the other hand, we have no doubt whatsoever that the exponential boom of sales come from the online operation, and we have to build the company for that specific purpose. If you have any doubt, if you think, well, are we going to focus more on off and on? No, we want to be excellent online, and we want to be excellent online and offline and integrating these two channels.
This is what makes this a winning situation because online, supplementing offline with a very excellently trained team at the stores. When the person, let's say, bought on the online and goes to click and collect, the person comes and collects something at the store and then buys something else.
Mr. Gabriel Couto from Santander would like to ask a question.
This is Gabriel. My question is more focused on the salespeople, the store people. You said that you already have a plan to bring back the salespeople that had left the company for some reason. How do you see the level of payment that you have at your organization vis-a-vis competitors? How is this project going?
Thank you for the question, Gabriel. Well, salespeople mean productivity.
If you look at the percentages of commissions, they are not going to be very different among the different retailers. What really matters is productivity. Theoretically, I will be looking for a much higher productivity than my competitors per salesperson. We already have this situation, and they are going to make more money. If they make more money, they are happy, and they come with us or stay with us. You know that they talk with each other and, "Oh, how much are you making per month, and how much this and that?" This attracts the good people that have left the company, which doesn't mean that we don't have excellent people in-house. We have excellent people in-house, and we have a team to train people even better. Our doors are open.
Very clear.
The Q&A session has come to an end.
I would like to give the floor back to the company for their closing remarks.
I would like to thank you very much for your interest in the company, and please continue to look at our figures because we want to have a major interaction with all of you and make it more and more clear everything that we are doing here. Please contact our Investor Relations team. If you want to see some information differently from the way we are showing today, all you have to do is, well, just make a suggestion. We want to adapt our information in order to make your life easier or your analysis of our business easier. Our obligation is to make our figures very, very clear so that you may have a good interpretation.
We have a lot in our hands, and it's not going to be very fast. The big message here is that we can do it. We have the retail DNA, and we are going to recover that. Our first stage is to go back to doing retail. Afterwards, we are going to do retail as nobody else. We prepare the company to go beyond retail. This is our goal. This is our target. Thank you very much. Have a good afternoon.
Grupo Casas Bahia's conference call has come to an end, and the investor relations department will be available to you to answer any doubts that you might have. Thank you very much for participating, and have a good afternoon.