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Mitre Realty Revealed as Buyer of Brazilian Luxury Brand Daslu

The real estate developer placed the winning bid of 10 million reais ($2.04 million) at auction, and acquires the rights to use all 51 of Daslu’s brands

In Brazil, the market for fashion brands is concentrated in the southeast region, mainly in the high-income neighborhoods of Rio de Janeiro and São Paulo
June 09, 2022 | 12:17 pm

São Paulo — São Paulo-based real estate developer and builder Mitre Realty Empreendimentos e Participações S.A. (MTRE3) has been revealed as the buyer of the luxury Daslu brand, in a deal worth around 10 million reais ($2.04 million) following an auction on Tuesday.

Auctioneer Santoro’s Luiz Fernando Sodré Santoro had not immediately disclosed the identity of the winning bidder, complying with the auction’s legal procedures, but on Wednesday the buyer’s CEO, Fabricio Mitre, told Bloomberg Línea of the acquisition, and talked of the real estate developer’s plans to strengthen its position in the high-end retail market of the city of São Paulo.

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The purchase will allow Mitre to commercially use the brand name Daslu to sell luxury items such as clothes, shoes, jewelry and household goods, as well some 50 related brands.

“Mitre Realty’s strategy has always been to differentiate its products from those of its competitors, and the acquisition of the Daslu brand is part of this strategy,” Fabricio Mitre said in a note sent to Bloomberg Línea.

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“We want to offer unique differentials in very high standard projects, a market in which we aim to be leaders in São Paulo, bringing a unique lifestyle experience, much more complete and comprehensive. With this, customers will be able to enjoy unique products, services and experiences, revolutionizing the way of living with quality,” he added.

Once the acquisition is completed, which is pending a decision from the São Paulo Court of Justice, Mitre will be entitled to use all 51 Daslu brands, such as Daslulu, Terraço Daslu, Daslu Vintage, Daslulabel, Villa Daslu and DasluShoe Space, among others, which offer everything from pet accessories to decorative, bed, dining and bath products, to clothing, cosmetics and even property management.

Known for selling top-of-the-line imported products, of brands such as Chanel and Prada, in addition to other labels, Daslu started out as a multi-brand store in Vila Nova Conceição, in southern São Paulo state, before becoming one of the major players in the luxury market in the São Paulo state capital.

Fabricio Mitre, CEO of the real estate developer that carries his surname, says that the acquisition of Daslu's brands is part of the strategy to move forward in the very high-level segment in São Paulodfd

Santoro commented on the atmosphere of the auction, which, he said, reminded him of one held at the auction house in 2010, when the Mappin brand was auctioned to the Marabraz chain.

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“It was a very disputed process, and showed how the strength of a traditional brand can still be great. This auction proved that the Daslu brand had and still has its value in the market. Daslu was not simply a synonym for a store, but for a sales concept,” Santoro said.

He said that the dispute was fierce, with a starting bid of 1,411,022 reais ($288,532), which corresponded to the updated valuation of the brand, but which climbed to the sale price of 10 million reais after 32 bids by five participants.

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The auction notice cited that “the referred rights are delimited in the respective processes before the INPI [National Institute of Industrial Property], in which the nominative element, the ownership class, nature and specifications of each segment are identified, according to the certificate in the records.

Based on the public notice, Mitre will use the brand name in products such as clothing, jewelry, costume jewelry, accessories, perfumes, hygiene products, decoration, promotions, communication, publications and events, among others.

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“For example, among the brands that are included is Terraço Daslu which was, for years, a strong name in events of various kinds” according to Carolina Lauro Sodré Santoro, an auctioneer at Santoro.

In early 2020, Mitre Realty went public on Brazil’s B3 index, with an IPO coordinated by Itaú BBA, BTG Pactual and Bradesco BBI. Currently, the company reports more than 5 billion reais ($1.02 billion) in capital in São Paulo assets to back the launch of the brands in the coming years.

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Last year, Mitre launched 10 enterprises that generated 1.8 billion reais ($367.8 million) in revenues.

An ‘interesting’ acquisition

For analysts Bruno Mendonça of Bradesco BBI and Wellington Lourenço of Ágora Investimentos, the real impact and financial gains related to the use of the Daslu brand in real estate projects will be difficult to quantify, but they estimate that the 10 million reais Mitre paid to acquire the rights to the brand in perpetuity is largely in line with the costs involved in licensing premium brands for a single project, even before accounting for additional costs related to the brands’ use.

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“Mitre’s acquisition of the Daslu brand follows a recent peer trend of launching branded projects with positive results, such as Lavvi’s Villa by Versace, JSHF/Fasano, Helbor/Artefacto, Gafisa/Lamborghini, among others. Most of these brand projects were based on partnerships, so Mitre breaks new ground by actually acquiring the rights to the Daslu brand,” the analysts wrote in a note sent to clients.

The Analysts described Mitre’s initiative as “interesting”, especially considering that “the amount paid does not imply a substantial change to the company’s cash position”.

Translated from the Portuguese by Adam Critchley