A $10 Billion Debt Wave Hits Brazilian Retailers at Worst Time

Brazilian retailers are struggling to survive long enough to enjoy the benefit of falling interest rates.

The companies have high debt loads, as do their customers. Competition from online retailers like Amazon.com Inc. is heating up. And refinancing debt is more expensive at home and abroad as yields rise and the market digests an accounting scandal at Americanas SA, a nearly century-old company.

An Americanas store in Brasilia, Brazil, on Friday, Jan. 20, 2023. Americanas SA imploded following a revelation that it was hiding more than 20 billion reais ($3.8 billion) of debt and has since filed for bankruptcy protection.

Photographer: Gustavo Minas/Bloomberg

“We’re talking about maybe the worst moment for Brazil retail since I started covering the sector a decade ago,” said Thiago Macruz, a retail analyst and head of Brazil equity research at Itau ...