Fashion Empire Azzas 2154 to Split Two Years After Failed Merger

Brazilian fashion retailer Azzas 2154, a result of the 2024 merger between Arezzo&Co and Grupo Soma, will undergo a corporate reorganization that effectively separates the two groups. This decision comes after more than a year of disputes between key shareholders Alexandre Birman and Roberto Jatahy, leading to the creation of two independent publicly traded companies: Arezzo&Co and Soma. The companies stated that this move will ensure greater focus, management autonomy, clear responsibilities, and capital allocation discipline, with the aim of accelerating operational growth and cash generation. The merger, valued at $10 billion when finalized in August 2024, did not deliver the anticipated synergy and sales gains, with the company's market value currently at $3.54 billion, less than a third of its post-merger valuation.

The reorganization will also establish a separate, jointly controlled entity for the popular brand Farm Rio, which will not be listed on the stock exchange immediately. Arezzo&Co will hold 57.4% of this new Farm Rio entity, while Soma will own 42.6%. The rest of the brands will be divided largely based on their original group affiliations: Arezzo&Co will retain footwear and bag brands such as Arezzo, Schutz, Anacapri, Vans, Alexandre Birman, Carol Bassi, and Hering. Soma will manage premium men's and women's apparel brands including Animale, NV, Maria Filó, Cris Barros, Reserva, Oficina, and Foxton.

This split will occur in two stages, beginning with a partial spin-off of brands and operations, followed by a share exchange between the two shareholder blocks. Upon completion, Roberto Jatahy's block will hold 25.95% of Soma, while Alexandre Birman's family will have 32.13% of Arezzo&Co and an additional 6.18% of Soma. Minority shareholders will maintain their proportional holdings in both new entities. The reorganization, which saw Azzas shares temporarily suspended from trading before surging 13.8% to $17.15, is subject to approval from regulators, including CADE, and is expected to conclude in the first quarter of 2027.