Casas Bahia burned its supplier credit — then the shelves emptied

Casas Bahia, one of Brazil's biggest electronics retailers, emerged in 2024–25 from an extrajudicial recovery negotiated with Banco do Brasil and Bradesco — a restructuring that produced a billion-real debenture issue backed by the banks. By August 2026 it was warning of 'relevant uncertainty' over its ability to keep operating, with a new judicial recovery among the options.

The mechanics were self-inflicted. The retailer stretched supplier payment terms to 149 days, from 135, financing itself on the industry. But international credit insurers — far stricter since Americanas' judicial recovery — did not follow the extension, and suppliers cut credit lines. With the anchor investor gone and bridge loans failing, consolidated inventory collapsed from R$5.4 billion in March to R$4.2 billion in June — 95 to 75 days of stock — leaving shelves empty: store revenue fell 3.2% April to June beyond the 298 closures already completed.

The disclosure contradicted a year of reassurances. In March, Valor had reported the company was late paying transporters and closing distribution centres; the company denied problems. By the August results, negative working capital had deepened to R$11.9 billion standalone and R$7.8 billion consolidated, the quarter's net loss reached R$10.1 billion, and the stock had lost 78% for the year — leaving little left to sell. Even R$6.3 billion in tax credits offered limited help, being difficult to monetise.

Consolidated inventory down from R$5.4B to R$4.2B in one quarter; negative working capital of R$7.8B; a Q2 net loss of R$10.1B; shares down 78% in the year.

The company financed operations by stretching suppliers while its credit insurers' cover shrank, breaking the loop the plan depended on.

Management denied mounting payment and distribution problems months before disclosing a going-concern risk.

The previous restructuring locked it into terms with two banks, complicating any new negotiation with the same creditors.

With no strategic assets left to monetise after the 2024–25 rescue, the failed equity raise left no fallback.

Supplier credit is a loan you take daily: stretch payment terms past what credit insurers will underwrite and your shelves, not just your cash, run dry.

The company entered phase two of its transformation plan — 298 store closures completed, cost cuts, active working-capital management — while assessing additional liquidity and capital alternatives, including the possibility of a new extrajudicial or judicial recovery. Suppliers, insurers and the two anchor banks now hold the outcome of a retailer whose market value had fallen faster than its ability to restock.