Everyone, and welcome to Vivara's 2024 Q2 Results Video Conference. This quarter, the company will dedicate 100% of the time to a Q&A session. The video with the opening remarks and financial performance analysis by Otávio Lyra, the company CEO, has been available since yesterday, and can be accessed at any time on Vivara's Investor Relations website. For those who need simultaneous translation, this tool is available on the globe icon labeled Interpretation, located at the bottom center of the screen. After selecting it, choose your preferred language, either Portuguese or English. For those listening to the video conference in English, there is an option to mute the original audio in Portuguese by clicking on Mute Original Audio. For sell-side analysts covering the stock, we offer the possibility of live participation.
To do so, just send a message with your name and company in the platform's Q&A icon, and we will allow the participation. By the dynamics default, your name and the company you represent will be announced, so you can ask your question live with both audio and video enabled. Just accept the request that will appear on your screen. For other participants, we advise sending questions through the Q&A icon at the bottom of your screen. If your question is not answered during this video conference, the IR team will contact you afterward to address your inquiries. Introducing the Vivara team, we have Mr. Nelson Kaufman, Chairman of the Board, Mr. Otávio Lyra, CEO, Ícaro Borrello, COO, and Mr. Caio Barbuto, IR Manager. We will now collect the questions, and to pose questions, please use the platform Q&A icon.
Good morning. Can you hear me?
Good morning.
Thank you for taking my question. I have two. One, you mentioned in your release that sales in May and June responded well to the improvement allocation of stock initiative, and June grew when compared to May. My first question would be: This 27% growth, is this connected to just a slight sample of your stores or to all your stores? And what about the acceleration trend? Do you believe that we will see this in the upcoming month? In your release, you mentioned projects to accelerate production. In Manaus, we're talking about Life and gold and jewelry. Could you please tell us what is your expectation and the timeline you have in mind regarding when this project will be ready, and also the deliveries and the outcomes that you expect in terms of gross margin for the upcoming quarters?
All right. Thank you.
Rogatis, good morning, and thank you for your question. It's a pleasure to be here with you. Starting by question number one, the growth is regarding all of our stores. We have the influence of the growth acceleration in Vivara after an effort that resulted in better supply in stores, and we were focused on a mix of gold and jewelry in the beginning. And as we speak, we are doing the same thing in Life, and we want to reap the results as soon as possible. We have seen an increase in the speed of growth, not only during this quarter, but now during this new quarter that... We're, we're in the middle, right? So we continue seeing acceleration in the brick-and-mortar channel with good reaction from Vivara and from Life stores.
I believe this is why we have been so excited, and this is a result of the actions adopted in the past months, be it in product, be it in our stores, be it in training or hiring new talents. So now, I believe that we see the result from this quarter. This is a quarter considered a quarter of trend reversion. We are growing with profit, and this means that we are diluting also and dropping our expenses. Now, your second question. I do believe that since April, we have seen a growth in the industry of Manaus. There is an increase of metal purchase and more production.
We started with 80 kilos per month to a volume that was over 140 kg a month, in order to capture, as soon as possible, the benefit of our product strategy, be it in jewelry, because of our collection relevance, also honing the products that we have in our stores to be more appealing and to strengthen our brand. This is not only seen in jewelry, we see this in Life. We have been, we are internalizing Life products in Manaus and growing. As you know, we've been seeing this for some time, and it's not accelerated. But Manaus started the year with 800 people, and now we have over 1,000 people working in Manaus, so that we can accelerate all these projects that could provide more benefits and more results to the company.
As I said, in the beginning of the Q2, we saw better supply. So this is something that started in the beginning of last quarter, and probably we will reap the results in the beginning of the last quarter of this year. We will not see the complete result of all these initiatives. This is something that we will develop from today until the end of next year, so that we're able to achieve the product mix that we want to have. Now, Nelson is here, and I would like to state that his contribution, especially in products, but not only in products, actually, I believe that his personal knowledge goes beyond jewelry. And we have learned a lot from him in terms of how to manage this business, and the team has learned a lot with him in terms of products.
So we don't only have Nelson here, we have Ícaro, that has an important role in terms of products and other matters. And they will and he will spearhead this movement and this strategy that in brief, will reap the results. And this is why we are so excited in the room and outside of the room.
Thank you, Otávio, Nelson and Caio. Our next question from Eric Huang, a sell-side analyst from Santander. Eric, you have the floor.
Good morning. Can you hear me?
Yes.
Thank you for taking our question. One, regarding the end of the release, you talk about the new store formats. Could you explain what are the main differences, and what have you seen in terms of sales, if they, if it increased during the first month, especially compared to new store openings in the past?
And also, if you could talk about the sales personnel commission, how has this process worked since you started implementing the adjustment? Has there been an impact that was different from what you expected? And I would like to understand what your expenses will be like during the next quarter.
Thank you for your question. I will answer. Before we talk about the store format, I wanted to improve the company as a whole. The store format is simple. Retail is divided in five main parts: product, price, brand, advertisement and people. Briefly, I will talk about what our strategy is now and why we see these results, because we're focused on Ps. Product is the most important point where we are improving. Our inventory was very low when we compared it to what a store should.
Each investment of BRL 1,200 and we need BRL 200,000 in product. We are going to increase these products in Life and Vivara until we have 15% of return over investment. I believe that we will increase our inventory with this. This increase of inventory will not be done empirically. Vivara will go back to the past. Vivara was a company that grew a lot throughout the 1990s. In four years, it increased its sales by 50 x. So I am here to go back to a significant growth. The market was happy with the growth and an EBIT of 20%. We weren't happy, so now we are implementing things, and this is just the beginning, but we will increase our growth curve and our sales much greater than what we have today.
Our prices have to be tested in different cities. There is a science behind this. What about points? Our store is more friendly. In the past, our stores wanted to be more profit, we don't. So the sales reps have to be throughout the store, and the salesperson cannot lose visual contact with the customer. You have jewelry throughout the store to easily show it to the customer. We are in a Chinese company, and we own this company. We copy Tiffany and Cartier models, and we use the lighting technology, and now we're going to have a Vivara store of the 21st century, much more powerful in terms of design architecture. And now, publicity, advertisement, that our advertisement had room for improvement, like, we had a product line.
We have A products, B and C that would be up for a lower purchase power. Public, our stores will focus on A, B and C. So here we have light, medium, and heavy pieces. We need more shop windows, so they will have more products in our showcase. Our strategies combine five products, 5 Ps. We have people and price. We have people. We changed the HR team, now we have more experienced people. We have a number of directors that left. Sales increased, our expenses dropped a lot in the office. We had 500 people, now we have 150 people in the offices. I'm not saying that they make less money. No, they're, we have high salaries here. And now commissioning, this is observed in life.
Life was projected to sell a certain amount, and there was a percentage in commission, so the sales reps were sending BRL 20,000 a month, sometimes BRL 30,000, BRL 35,000. And our managers, so around 30 people were laid off, and now we hired people with lower salaries, and we are supervising all of our stores. And we had general managers, managers and regional managers that are working remotely. We're not spending money in tickets, and we significantly dropped our cost in a year. So this would be it. Now, regarding expenses, we significantly dropped our expenses. And could someone here talk about the drop on expenses?
Thank you, Nelson, for the explanation and for participating in our call, and also showing us what our initiatives are like. I would like Ícaro to tell us how we allocated the synergies here. Good morning to everyone.
It's a pleasure to be here. Operational efficiency and efficiency was focused between plant, office, and stores. This was mainly geared to people optimizing these expenses. So we focused on these three fronts. And this is aligned with store commissioning, the reduction or laying of people that were idle, and this wouldn't make a difference from the short, mid, and long run to the company. The second aspect of the mini transformation plan was geared toward the creation of a purchase center and indirect purchases. This is underway. We have 25% of this plan executed. We strengthened our procurement team with people that were experts in the market, and that were-- that had the skills to implement our plans. We've reaped fruits from negotiations, and we've seen the effect in OpEx and CapEx, especially in cost reduction in stores.
We will see this effect in the upcoming quarters, and the company will be more agile, communicating better, and with an important impact on our EBIT. Eric, we still have not opened this new store format. We will inaugurate this new format of store during the second semester, and we will have news to provide you with. Thank you, all of you....
Our next question, Danniela Eiger, sell-side analyst for XP Investimentos.
Good morning. Thank you for taking my question. I have two. One is a follow-up, and I missed the first part of the question of the first analyst. I want to know about growth dynamic. This inventory adjustment started during the quarter, but there is still room for improvement. I would like to verify if this acceleration is only the beginning, if we can see continuous acceleration and how this transfers to Life.
I believe that this will be a second wave of inventory adjustments, so we will see more growth in both brands because of the inventory adjustments in store. My second question would be, in terms of Life, we've seen a slight slowdown, perhaps because of the normalization of the base. I would like to know if you've seen more opportunities in adjustment, in products. I would like to see, I would like to know what your vision for Life is.
Okay, Danny, I will start with your first question, that we already approached. We've seen acceleration throughout the months of this quarter. This started in March, April, and here we saw the reaction and the growth throughout this month was different. This is clear in the release, so you can see what the movement is like and the size of the benefit as we execute the strategy.
As I said, first, it was jewelry, but now we are also allocating better in Life. So we will see a reaction in Life throughout the upcoming periods. But as you anticipated, this is just the beginning of a desire of accelerating sales. And there is nothing connected to the product strategy, the redesign of collection, mix, and other jewelry items, and we will capture this by the end of the year. We are starting a cycle of strong growth, a result of all our effort, and I believe that we are growing. There is a point we want to work, we want to resolve the lack of stock that we had in stores. So now, so we are resolving this, and we are focusing on this in order to resolve this problem.
We are going to see the results in the upcoming month. Also, because we're focusing on products, our factory is focusing in order to have products in the store as quick as possible. Life is in, is based on a strong base. The acceleration is natural. In Life, we see opportunities when we see the product mix, especially connected to collections. And as you know, there are more collections than moments. We have 30% and 70% between collections and bracelets, and how we transformed ourselves in the past three, four years. When we see collections vis-à-vis the other Life categories, we see that there is space to better allocate products, and other Life offers an opportunity to have more relevant inventories and capture the increase.
I would like to talk about stocks. From the 5 Ps, inventory is the area where we have more opportunities.
At the beginning of Vivara, when I was 26, 27, I built a house on the beach. I had two stores. I built a small house with a swimming pool, and I used money from Vivara. I took money out of Vivara, and when I sold the house, things went back to normal. Out of 10 people, we have four. The increase of people in the factory that went from 800 to 1,000, that throughout the management, it went to 700, and until yesterday, there were 1,100 employees, and this is why our golden jewelry production would be 80 kilos a month. I believe that we will have 180 kilos of production this month, with 40%. From 40% to 0% to 10%, we will have 30% of sales increase.
Out of 3 points of diminishment, of rupture, there's more sales. If we take 30% of the rupture, we will have an increase of sales. If we take the 40%, we will have an increase of 13%. Our sales will be BRL 3 million, and 13% of 3, BRL 3 billion. That will be a significant net profit for the company. This is the future. We're focusing on our positioning.
So Mr. Nelson and going back , you spoke about Life performance. If we break it out per area, we see different performance in the different periods. We have same-store sales better than the past same-store sales from Life.
There are lots of opportunities. As Nelson mentioned, there is an important opportunity because we can gradually diminish the products in plant and inventory, and we will have more inventories in our store.
This is a way of capturing the benefits in the future. Thank you very much for the results.
Congratulations for the results.
As we have no further questions, we end our Q&A session. Our team is at your disposal to answer any further questions. Thank you very much to all participants, and have an excellent day. Thank you very much.