Updated 09:04 PM EDT, Sat, Sep 19, 2020

Brazil's Havaianas: Brand Endures Economic Crisis, Remains Profitable

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Even with the economic crisis in Brazil, popular flip-flop brand, Havaianas, has maintained its strong sales and avoided the effects of economic crisis. 

Huffington Post said the brand has "remained profitable" despite the decrease in revenues during the first quarter of the year.

It noted that two years ago, the Brazilian footwear company opened a new plant in Montes Carlos which increased its production capacity by 40 percent, equivalent to more than 102 million pairs of footwear per year.

This crisis did not discourage the owners of the company, but instead motivated them to try other markets.

"The crisis affects everyone, it has not been an easy year. Exports saved us. The appreciated value of the dollar benefited exports, and we felt a boom in sales in the second quarter," Rui Porto, a person part of the company's rebranding, told Huffington Post.

According to Business Today, Havaianas had been perceived as a poor man's footwear brand until the 1990s, which was 30 years after its establishment.

"A sharp drop in sales in 1993 forced the company to revamp the brand's image," added the same report, noting that the brand has been known to be a premium one, not only in Brazil, but all around the world as well.

The Huffington Post report said that Havaianas producer, Alpargatas São Paulo, changed history with the rubber sandals, becoming one of the most popular in the world.

The company has indeed maintained its steady production and international presence, despite the growing economic concern in Brazil.

Seeking Alpha reported that the economic situation in the country is not improving, especially with the impeachment proceedings against President Dilma Rousseff, low prices of commodity, falling GDP and industrial output, and the lack of thorough analysis to find opportunities despite the crisis.

"Brazil's economy is having a hard time getting out of trouble. There are not only problems with fundamental aspects of the economy, but there are political ones as well," the same report highlighted.

The problem in politics is also believed to eventually lead to Rousseff's impeachment, although Seeking Alpha said having the current president out of the picture would be a good thing for the economy since she is not a popular leader.

With her approval rating reaching only a single digit, many believe that this will affect her leadership in the country.

And because of the corruption scandal she got involved in, Financial Times said that such issues have disabled the Congress from passing measures needed for the economic crisis, and have caused the economy to shrink to 8 percent.

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