Vivara Participacoes SA

BOVESPA:VIVA3

Earnings Call Transcript 2020-Q3

[Operator]

Good morning. Welcome to Vivara's earnings conference call regarding the third quarter 2020. We informed that this event is being recorded and simultaneously translated. [Operator Instructions] The questions received via webcast will be answered later by the IR team. Now we would like to give the floor to Mr. Márcio, who's going to start the presentation. Please, you may proceed.

[Márcio Kaufman, executive]

Good morning. Thank you all for participating in our third quarter 2020 earnings conference call. Today, we have here with me, Otavio, our Financial Director; Paulo Kruglensky, VP of Operations; and Melina Rodrigues, Head of Investor Relations. We are in separate rooms. This is why we're not wearing a mask.

The results of the third quarter 2020 have had a very special meaning to us because they close our first listed year. And secondly, because they show the recovery of most challenging scenarios lived in the company. They have been very intense 12 months where we left from a private company to aim for bolder dreams. We have been seeking more professionalization, advances in governance and stronger growth paths and also different paths, all of this in a new environment with more visibility. We've always been a very discrete company. So it has been very challenging and quite interesting to live this new moment for us. I'd like to thank our shareholders who have been supporting us to build this new cycle.

This pandemic has been a great challenge to us. Since it started, we've been learning daily, and this is what the team has been doing and with great resilience, determination and believing that we can always overcome ourselves. Since then, we've taken harsh measures that were necessary to protect the health of our customers, associates and partners, all of this without losing sight of the financial health of our business.

Now after 7 months, we have been observing month after month, the growth in sales. And now we reach a growth that is quite similar to what we had before the pandemic. The team is very engaged and delivering more than we expected. Month after month, we've been able to exceed the goals we had proposed ourselves in April. The results we delivered yesterday, we've had a 7.2% growth in September vis-à-vis 2019 with positive sales. E-commerce is growing consistently with 3 digits, even with all the stores opened. A very important point in our result was gross margin that grew 200 bps regarding last year. This has been a great accomplishment to us because even in a scenario of growth of raw material, the exchange rate, we've managed to attain this result. This, especially due to the fact that we are verticalized and that we can control all the steps of production. And we adapt our product to any price of raw materials and especially due to the efficiency of our pricing and inventory management.

Another super important factor that deserves highlight is the growth of gold jewelry because even in this challenging scenario, it was the category that grew the most. So it is quite admirable to have reached in this quarter, a 20.4% EBITDA margin and a net margin of 15%. This is to be celebrated, and I'm very proud of our team.

Now we move to the main seasonality of the year, Black Friday and Christmas. Most part of our sales and our net revenue is concentrated there. We're very well positioned in our e-commerce. We made several improvements in this quarter, increased inventory, better regional experience. And we've invested a lot in the enhancement of our operations. We have incorporated Joias em Ação, and our dealers can sell to customers online, and this accounts for over 40% online with our sales team. So that's why I say that this has always been a reality. And to us, it's quite natural to implement these tools in the past months.

Category of products, new launches that are very interesting for year-end in all categories and with a very well-focused marketing strategy to the moment customers are facing with social distancing. With this, we have been able to get in the last quarter, quite interesting results. In October, we closed with 14.5% growth regarding last year. And now in November, we have the same sales level. Last week, we held our annual sales convention that we always do live, and this year was digital. It was quite interesting having over 1,600 people connected. It's quite interesting to see people meeting again all store managers, all the salespersons, what we usually are not used to doing it digitally. It was very exciting to see the results and celebrate. And they know they are -- they outstand in the shops where they were present, especially prepare and energize our team for year-end for Black Friday and Christmas. So we always create a very welcoming environment and encouraging to our team during these conventions.

Our focus on long-term project is quite interesting and quite encouraging for the team. Next year, we will open between 40 and 50 new stores for Vivara and Life. The other plan is to enhance the Life brand with better store operations, well focused, different from Vivara, totally different experience, focused on Life, specific training in which we can train the team in each detail of the Life product and a strategic marketing renewal to leverage sales of larger array of products so that we can actually leverage the Life brand. And in omni, technological renewal that we've had this year to prepare Vivara for greater growth and attain digital transformation in a short period of time.

This has been a very challenging year so far, but we are very happy with the results obtained due to the -- to all the challenges we've had to face. We're still very well positioned to the consolidation opportunities and prepared to reinforce our market leadership.

Now I'd like to give the floor to Otavio, who will show the figures for the quarter.

[Otavio Chacon Amaral Lyra, executive]

Thank you, Márcio. Good morning, everyone. Thank you for your presence. I'm going to go over the details of the super positive results that we've demonstrated. Márcio said, the whole team is very proud of what we are presenting to you here today.

Starting on Slide 3. The company has shown gross income of BRL 308.1 million with stability compared to last year, only dropped 0.2% with highlight of the physical stores, BRL 234.2 million with a drop of 16.5% regarding the same period last year. And e-commerce that is still growing, 3 digits, quite fast, almost triple, recording BRL 70.6 million in the period with a growth of 182% with a share in the quarter of 23% points of our revenue, stabilizing at a more comfortable level post pandemic, post reopening of the stores. We have almost all the stores open. Only one is still closed.

Net revenue with a growth of 1%, BRL 242.6 million in the period. Same-store sales were 3.9% negative considering e-commerce. This growth is based mainly on price. We have been dealing with price, and we'll talk a bit more about that when we talk about sales profitability. And we have been -- since mid-last year, second semester last year, we've been transferring prices. After the increase of this -- beginning of this year, we continue transferring to prices gradually and protecting profitability.

Here, what is important to highlight is the evolution we've had month by month. Second quarter, we continue speeding up growth of sales month by month. Highlight to July, we had mentioned to you previously in the disclosure of the earnings results of previous quarter, minus 10.3% with 214 stores opened. For September, we have a stronger development growth of 7.2%. And the October performance here that has shown, once again, another month of acceleration, 2-digit growth of same-store sales, about 10%, which makes us feel very encouraged to move into this great period of seasonality.

I think we should reinstate the performance of Vivara in this industry of jewelry that has had a drop of 20% reported. Vivara in the past quarters has been gaining market share, performing and growing more than the jewelry market. And during the pandemic, we suffered less than the industry as a whole.

Looking at the mix or highlight to sales mix. We have been expanding share of jewelry in this revenue, greater share of jewelry in e-commerce through the program Joias em Ação. Jewelry, 5.2% to 56.9% and takes share of the revenue both from watches, contributing more to profitability, that is losing 2.2% points and Life as well. In this context of beginning of expansion, replacement of stores and we lose 7% points in the revenue.

Moving to Slide 4, we see the detail, the breakdown of revenue on the off channel and then on. A highlight of performance of stores, as markets reopened, they start working for longer periods of time. They recover sales invoice. In September, we have 72.2% of revenue. And now we count with 262 stores reopened. Only 1 in the Guarulhos that is still shut in this period.

And here, with the highlight to the evolution of the pressure of the revenue of these stores. Even with quite restricted flow of customers in shopping malls with shorter opening hours, we get to a running rate in September to only 3.2% of revenue penalty compared to those periods last year, and the trend should be improved in the last month and beginning of November that we see here. Here, we continue -- well, our sales mix is still quite strong as a trend for jewelry with -- that gains 5.6% points. And we've seen in the previous slide, a reduction of watches and Life.

Moving on to Slide 5, we see this accommodation of e-commerce. It stabilizes in the quarter, accounting for 1/3 of sales. And in September, it accounted for 16.4% of sales, trend quite similar to what we saw happening in October. Here, we have various actions of management of the company as a whole. We gain efficiency in e-commerce, in addition to those that we talk a lot, the Joias em Ação technology support to base all this new platform, but we have evolved in the preparation of more convenient alternatives to customers. We have enabled same-day delivery in São Paulo. This greatly contributed to the lead time so -- and actually, we improved satisfaction over the period.

We've also brought towards having fewer dependencies of these deliveries of ours via post office, diversification of services that we provide in the different regions of the country. We've been diversifying carriers and service providers, bringing new people, Transfolha, Jadlog. And actually betting on this efficiency gain in cost to us in the past quarter has been quite an interesting evolution that we've seen over the past months. With this, we've managed to reduce the unit cost by freight and we gained more scale. It should be improved, and we should reinforce these partnerships, reducing the average delivery time. And in the past 2 months, we had pickup in store that was resumed, that was disabled with all the stores shut.

We should highlight the upload of a new website. For those of you who have had the opportunity of seeing it, have a look. It's greatly improved, focused on customer experience. It has a search algorithm that is much better, no matter which device you use. That was a fault that we had in the past, and we had signaled that we have been correcting it over time. And now we have a much more pleasant experience and much more assertive to our customers. We've been working with better customer and user experience, the way we communicate with different clusters. And with this, we gain efficiencies over time. We still have a lot to evolve.

Moving on to Slide 6, we show the reason of this gain of relevance of jewelry to us, the category that has been actually driving the growth of the company. Sales recover in the past quarters, which is jewelry and why it happens. E-commerce growth -- grows almost 3x with almost 20 additional points of mix of gold jewelry, and this makes the profitability of this channel to be greatly improved. And it happens, especially due to what Márcio mentioned, Joias em Ação started the quarter accounting a bit less than 30% of online sales, and it ended the quarter in September accounting almost 46% of sales online, with 70% of share in jewelry in these assisted sales, direct sales. This continues to have greater relevance in the digital channel to us, to Vivara. And it will certainly sustain this high level considering the share the company had pre-pandemic period that was about 8% of revenues.

Moving to Slide 7. Now we show the evolution of gross profit and gross margin. Company recorded BRL 169.22 million (sic) [ BRL 169.29 ] of net profit, 3.8%, almost 4% regarding last year, and gaining 2% points of profitability from -- to 69.8% margin. This is the pure effects of the appropriate pricing policy of the company, specific [indiscernible], as we anticipate, is actually implicit in our inventory. And we've been protecting profitability in an efficient format with good trends, not only in the quarter and also the recovery of the accumulate in the year. The second quarter, the evolution was quite significant. And now we deliver in a consistent way robust results, not only of sales, but also good trends of profitability.

We still gained profitability. This profitability gain comes directly to the efficiency in the unit price, not only in the pricing policy, but the sales mix, mix of products in subcategories. And we -- with this, we gained almost 2.4% points of efficiency cost in the quarter compared to the same period last year and lose a bit due to the greater relevance of the expenses in the plant. If you remember, previous quarters, we've showed this information a bit more, and we have these operating expenses. There were expenses. And now we see that within the total cost of the company actually affecting the comparison between periods. So we still have efficiency and this ensures profitability.

Now moving to details of selling expenses. On Slide 8, we show the evolution in selling expansions -- of sales expenses. They were BRL 79 million over the period compared or -- dropping 0.4% compared to last year, good trend. Main reflects of the compliance of the Law 14,020, the MP 936, reducing work journey. With this benefit of usage that it was extended to Vivara until mid-fourth quarter, we're going to keep on presenting gains in this front. And obviously, in the period of 2021, we should go back to normal levels of personnel expenses without the benefit of this compliance to the law.

Obviously, during the pandemic in the third quarter, we still have engaged in negotiations that were quite strong with shopping malls, the places where we have our operations. And we managed to get significant gains, over BRL 4 million in the period, in the negotiations we've had over the third quarter. And here, partially offset these 2 benefits by the more -- the greater relevance of our online channel. Freight is a bit heavier, but the marketing line has greater relevance compared to the same period last year.

Looking at Slide 9, general and administrative expenses, we've recorded BRL 24.7 million in the period, 17% drop compared to last year, accounting for 10.2% of net revenue. And here, we lose 1.4% points in profitability in the period that we carry the trend of having an administrative structure that is more closed, the reinforcement of governance, all these things are very important, in addition to new directors and reinforcement of strategic teams. A line that we see the trend, we have been investing quite a lot in these projects of omnichannel and digital acceleration, and this vis-à-vis the trend of last year has created a greater mismatch.

Moving to Slide 10. We see the trend of the EBITDA -- adjusted EBITDA in the period, especially for the effect of 2019. We don't have adjustments here in 2020, only IFRS 16 for comparison purposes and '19 because of the credits of ICMS on the PIS/COFINS bases that were quite relevant, impacting the operational profitability of the company. Excluding these points, we had BRL 49.6 million EBITDA in the period with a drop of 7.4% compared to the same period last year. And 20.4% of margin, dropping almost 2% points compared to the same quarter last year, getting back almost to levels that were similar in terms of profitability of pre pandemic with the trajectory of acceleration. And now we start discussing this topic. As Márcio said, we expect 40, 50 new stores over next year. The opportunity is still quite clear to us. And what can be redesigned here is the speed and actually the tempest of this acceleration.

Moving to Slide #11, we talked about evolution of net income. Moving from adjusted EBITDA, this pressure of 1.9% point of adjusted EBITDA to EBITDA. Recurring EBITDA with the IFRS 16 effect, it's almost 0. The company presents expansion of 0.4% in the period for BRL 63.6 million EBITDA with 26.2% of margin in the period. We lost 1.9% points with a greater depreciation, more relevant due to the acceleration of investments we made since the second semester last year, partially offset by the financial results that are being more efficient. Net cash, past IPO, better investments strategies, reduction of the debt, average cost contributing to this performance. This leads us to a trend of BRL 36.1 million of net profit or net income in the period with almost 15%, dropping 1.4% points regarding the same period last year.

On Slide 12, we show the evolution of investments in the company. We've invested BRL 11.4 million in the third quarter 2020, dropping 22% compared to the same period last year, accounting for 4.7% of the revenue over the period, in the few stores that we have -- had been working on in the reforms and restoration, specifically during the period, but especially in systems, IT, in this digital transformation that Márcio put quite well and also in the acquisition of certain devices that were previously rented.

On Page 13, we see the evolution of the indebtedness of the company. We have almost BRL 10 million additional of gross debt in the period, closed September with BRL 330 million here. And here, the message is the following: we start making a movement of stretching the indebtedness of the company or extending it. That was almost 100% in the short term, maturing in the beginning of the third quarter next year. So here, in September, we had made this first move; October, a second move in terms of original maturities of previous contracts. Today, we have almost a bit over BRL 110 million of debt in the long term and a bit more than 1/3 of total indebtedness. This increase in debt is due to -- it's a small increase, but it's mainly due to the fact for the company to tap on the possibility of the exemption of the IOF. And this is valid on the rollout that will be applicable to future rollouts of the same contract. So this benefit is quite important, and we decided to expand the debt and the deadlines to increase the benefit. And we'll adjust the size of the indebtedness of the company early in the first quarter of next year, when we have the maturity of the most part of our indebtedness.

We closed the period with BRL 612.2 million in cash. We continue to generate resources in a relevant way. Most highlights regarding previous periods, even during the pandemic, we still generate operating cash in a strong way. We start consuming resources and working capital, but the results allowed us to keep on generating net cash. So net cash at the end of September was BRL 282.2 million. The company continues to be super deleveraged with great advancement. And we are very prepared to benefit opportunities not only in the fourth quarter, but also throughout next year, too.

On Slide 14, we highlight the operating cash generation of BRL 32.2 million in the period or BRL 20.9 million post payment of investments that we made over the period. And here, as I've mentioned, we see details of the acceleration of sales, taking up almost BRL 14 million here in accounts receivable, recomposition of inventories, preparing the operations for Black Friday and Christmas. And here, the recovery even late September of commercial activities of our acquisitions, representing payment of -- payment, a significant payment in the line of suppliers. Accumulated of the year, BRL 166 million generation of operation cash against -- after the payment of the almost BRL 40 million of investments we made up to the moment.

This is what we had to present in today's results. We expect very much that you've liked it. To reinforce it, we are very happy, very excited. When we look at this in our internal meetings, presentation of monthly results and all these charts present great recovery here in a format V of Vivara, and this message has been quite powerful. And the sales convention, very moving and touching to the whole team. Everyone, our sales staff is super energized to start and be very prepared to deliver these results with significant evolution, both on Black Friday and Christmas.

Thank you all very much. And now we're going to open up for questions and answers.

[Operator]

[Operator Instructions]

Our first question comes from Mr. Gabriel Simoes, Itaú BBA.

[Gabriel Simoes, analyst]

I have 2 actually. The first is regarding growth -- market growth. The market has had a 20% drop in a period that your growth seems to be a gain of share. But I'd like to know from now on with the resumption of stores that we've seen, 14.5% growth that -- sales that you reported for October seems quite impressive here in our view. We'd like to understand how the market is growing now over this fourth quarter. And in this movement of the future quarter, how much of this growth you see comes from market? How much is the gain of market share if dynamics changed a bit from the third quarter, think about the brick and mortar stores and M&A? Well, we expected to see with the crisis, lower margins. How do you see the industry in terms of consolidation? If you see a scenario for the industry that is quite prone to M&A? Or if you're thinking about doing something in this regard, not only organic growth?

[Otavio Chacon Amaral Lyra, executive]

Thank you, Gabriel, for the question or for the questions. Starting with the first question, we actually bring data that are historical of reliable basis. We use the [ CLO ] report to base ourselves on this historical market share gain. And I've mentioned, unfortunately, we don't see data of the fourth quarter. There is a kind of lag in terms of publication. We don't have information regarding October to December considering historical trend and performance of the company. The historical trend of the industry and performance of the company in the past few times, I think the market share gain, it will remain, and should remain further ahead. And these dynamics of our scale -- of our benefits for the scale we have, have abundant inventories to be able to transfer the prices in a gradual way than most of the market is also still ensures us strategic advantage, especially now when prices are still increasing a lot. I think gold in the past 12 months, we had about 70%, silver increased 120%, but it's twofold of what it used to be a year ago. And this obviously brings a benefit to us and others over the same period.

As to M&A, we're always keeping our ears open to excellent opportunities. We reinforce the message that our focus in the short term is in the reacceleration of the physical expansion of the company, organic growth of the company with opening of Vivara and Life stores so that we get sort of critical mass and gain in analytics to be able to better direct this growth and taking up more spaces with super attractive returns. We see certain turmoil in this inorganic reality in the retail industry as a whole and ours as well. But I believe we are focused and actually delivering our homework, which is quite a lot, but always attentive to opportunities that may come up. There is nothing different from what we have been communicating over the past quarters in this period. And Márcio, would you like to add anything?

[Márcio Kaufman, executive]

To us, it's very important to continue with our market share strategy gains. We have 12% of this market, of the jewelry market according to the market monitor. So our ability to expand not only Vivara and Life will help us increase this percent -- percentage. In addition, we are present in other categories, I cannot -- well, like glasses, fragrance, leather accessories and pens. We can actually have penetration in other markets than our core market. Regarding M&A, we're still open. We're not looking for anything actively.

[Operator]

[Technical Difficulty]

Excuse me, Mr. Speakers, you may proceed.

[Márcio Kaufman, executive]

I think we can move on to the next question.

[Otavio Chacon Amaral Lyra, executive]

Yes. Sure. We hope we have answered your question. Thank you.

[Operator]

Our next question is from Ms. Daniela, XP Investments.

[Daniela Duarte;XP Investimentos;Analyst, analyst]

Congratulations on your results. I have a couple of questions. The first is evolution of gross margin, obviously surprising the work that you've been doing to protect and expand considering increase in raw materials price. I'd like to know how you see this evolution from now on. And this combined to EBITDA margin since you tend to the recovery of sales. So if we can start imagining that possibly in fourth quarter and next year, as you -- how do you -- what do you think about the trend of EBITDA margin? And in the recovery of sales as well, if you can give us a bit more flavor as to how sales have been evolved over the fourth quarter. You mentioned that it's been improving gradually. Your e-commerce continues to be quite sound. The initiative of Joias em Ação was quite assertive, both to bring flow as well as to help in product mix. How has this been evolving?

And if I can ask you a last question, a bit more regarding not so much M&A, but in terms of expansion. If you can give us an update in terms of the expansion of a new brand, more focused in lower social classes, if you were thinking about this project, considering the pandemic and how this is evolving?

[Otavio Chacon Amaral Lyra, executive]

Thank you, Daniela, for the questions. Now as to growth, profitability and how we've been protecting ourselves regarding this increase, I think we should start by the natural part of the behavior. We have been presenting this trend since the second quarter last year. And in this dynamics of more stilted increases of raw materials, be it for the dollar exchange rate and the raw material price itself, we have this benefit of following the market in some specific categories that are more flexible in terms of price and to be more -- be able to transfer prices, more focused and specific. So we have other benefits that contribute to this profitability. We have the prices of metals. And once we refresh our portfolio, we also gain profitability in this insertion of new products. This is a great point. I see this evolution, these accomplishments in the short term of the gains that you see.

Considering reduced average cost, we were able to buy practically throughout the pandemic period when the plant was shut. We shut the plant in late March, and we resumed operations more towards the end of the second quarter. And with that, we have managed to keep an average cost quite lower, considering the different pricing of gold. Our concern regarding keeping profitability starts much more now in the fourth quarter onwards than in the previous period because now with this great seasonality and throughout the whole year, next year, we have a lot of turnover of products in our inventory, and we carry our average cost at higher costs of product. And we start rebuying gold month by month as we need at levels that are very high, considering average cost.

So the comparison that we have to the fourth quarter last year is quite strong. In this sense, we have a challenge of reserving profitability in these events of great seasonality. But we should highlight the volume of this anticipation. We gained margin now about 70%. In September, around -- it was almost 73%. So we accomplished a bit more now and to absorb part of this impact in subsequent periods. As expectations, we should end the year with a margin around 68%, still with good stability, little historical volatility of this number over years, even in a year like this. And I think we can expect we'll do our best to be able to keep this margin level even throughout 2021 as we work to absorb this price increase, not only continuous pricing increases and working on the mix that we offer and the product, as we've always shared with you.

[Márcio Kaufman, executive]

As to sales, may I? As to sales, we have been evolving in all categories. In the third quarter, we had a greater growth in gold, as you could see, more than silver and watches. In the fourth quarter, we can see watches and silver speeding up at a higher level than we had in the third quarter. And not only gold that keeps on growing more than the other categories, but now silver and watches as well. So what we see now in this 4Q is an acceleration of everything. As in the third quarter, we sold with sales practically equal to 2019. Now we have a growth of 14.5%. It's quite well distributed. E-commerce still grows in 3 digits, has accelerated more in the second quarter; and the third and fourth is stable, around 150% growth. And we don't see from now on in the forthcoming months, a change in this proportions between e-commerce and stores. We believe it should be very close to those levels.

What we see that encourages us is this greater acceleration that we see in Life. That is a category that grew less than gold. And since we have many initiatives specific for Life, now we can move into more detail of the operations to ensure that it is very well focused on Life client that is different from Vivara. Life training sessions, we've had some more detailed training sessions than we've had before. And operations, the compensation of the sales team, and it's encouraging and marketing collections that are much more assertive to be marketing for all. So with the previous campaigns we had, we worked very much on diversity of a piece of jewelry for Life, for everyone, and this brings greater return than we've seen in the third quarter.

[Paulo Kruglensky, executive]

Regarding the expansion, we see great opportunity of resuming our speed that we had in terms of expansion, pre-pandemic period. Márcio mentioned that we should open 40 to 50 stores next year, both of Vivara and Life brands. With Vivara in certain markets where we have no presence, the market is very welcoming to the brand, and great opportunities are coming up with vacancies in shopping malls at this time of recovery. Life, the recovery, Márcio mentioned and the visit we're making in terms of the mix and concepts allows us to have a great recovery with the opening of stores.

Regarding -- we have 12% share. Well, the market exists, and it's a market that does exist, and we are starting analyzing all opportunities, if we are open to M&As or we've also been analyzing market up, market down opportunities. Your objective is to consolidate market and grow organically and perhaps with other brands. And there's a possibility of the market in terms of consolidation is great because of the share that we have. We see great possibilities there.

[Operator]

Our next question comes from Mr. Eric Huang, Eleven Financial.

[Eric Huang, analyst]

Congratulations on your results. We'd like to understand a bit better, if you could give more visibility regarding the opening of new stores next year, how much percent would be Life and how much percent would be Vivara? And regarding contracts, how are you doing in terms of contracts? For the openings, you have some signed contracts. What about the execution of these openings, please?

[Paulo Kruglensky, executive]

Well, as to expansion, we think about opening more perennially scaled next year, not concentrated in quarters, considering our execution capacity, not working on peaks and valleys. We're very close to the shopping malls and analyzing the openings. Between Life and Vivara, it depends very much on the opportunities that are coming up, but it could be around 50% each, depends very much on point of sales. In Life, we're going into more mature shopping malls and merchants perhaps with lower vacancy. Today, we may have greater vacancy. So it depends very much on negotiations, but we believe we can do a very good job in both brands.

[Márcio Kaufman, executive]

Our -- well, for us to expand Vivara, it is easier, so to speak, than Life because Vivara, since we are present in the most -- the major shopping malls, it's easier for us to find good spots, good corridors, corners, et cetera, when we want to open a Vivara store. When we want to open a Life store, we are more demanding because we're moving into the best shopping malls in the country because we're not going to go to any point people offer us in the best shopping malls. We could go into more shopping malls in Life if we so wished, but we'd prefer to wait until we have the ideal spot.

As Paulo said, our intent is to open half Life, half Vivara. But we -- if we don't find the ideal points for -- or spots for Life, we will not open in the same proportion for Life. But the chance of our being able to attain these 50% of Life is great because we are working with a number of over 40 shopping malls to open Life, and we should get at least 25 -- between 20 and 25 Life stores next year.

[Operator]

Our next question comes from Ms. Olivia Petronilho, JPMorgan.

[Olivia Petronilho, analyst]

I have few questions regarding the expansion plan. I think we see a growth that is quite fast in e-commerce. I'd like to understand that in the long term, you -- this greater presence of e-commerce changes a bit mind of what should be the ideal stream of the company.

My second question is looking at growth. If you could talk about performance, be it price and volume. I think we're seeing great growth on the part of jewelry, average EBITDA greater. What about the volume for the next quarter? And the IPO, and now there -- it's been some time, you have more data to help us. How do you see cannibalization of the stand-alone stores of Life vis-à-vis the Vivara stores, the portfolio of Life vis-à-vis Vivara in the same shopping mall?

[Márcio Kaufman, executive]

Okay. I'll try to answer your first and third questions together. And then the second, I'll let Otavio answer. With regards to the e-commerce growth, we believe that now that is -- it is around 16% -- we hit 100% and now it's 16%, we believe it will stabilize around 20%, 25% in the midterm. Of course, this is our estimate. We would never imagine that we would have 16% this year. So it grew much more than we expected, but now its share dropped faster than we expected. The stores attained 85% even with social distancing. We see how human beings like to interact. Shopping malls open, they -- people went back to the shopping malls. It's impressive to see how now that the shopping malls are operating -- opening 12 hours, from 8 to 12 hours, increased a lot sales in São Paulo. So we're very excited about the fact that the customers like to touch our product to buy. It's a category that actually the physical store helps greatly.

I'm very excited to see the [ Uber ] channel, the 40% of our sales -- 45% of the website sales have a salesperson code. So I feel very excited to see that we can open Vivara stores in smaller cities, and we need to sell very little for a payoff. BRL 1.5 million, BRL 2 million in the stores, they pay off. And we believe that the fact that we have this possibility that is very well structured, it will allow the stores to be more profitable because salespeople will be able to sell on the website or at the store. We see it much more as value added between channels. The fact that we need to sell very little does not scare us to grow more. It would be a risk if we had a small gross margin and very high expense level. Since we don't, the possibility of our opening stores in shopping malls in small towns is quite attractive. That's why we're not changing our long-term plan. What may happen is perhaps to extend this time a bit more because of the greater growth of e-commerce that is higher than we expected. This is the plan. The fact that we have little competition makes us feel very excited to have the growth of physical stores in the long term.

Otavio, if you could take the second question. I don't know if Olivia would like to repeat it.

[Otavio Chacon Amaral Lyra, executive]

No, it's okay. I'll answer it, Márcio. Second question was regarding volume trend that we've seen in the quarter with the price transfers that we made, yes. And the company as a whole, we lost about 14% in the volume in this quarter with the price component more than offsetting this effect. And as I've said, with a highlight to jewelry that have much smaller price flexibility. We see price of jewelry growing about 20%, losing less than 10% in terms of volume. This has greatly impressed us here, and we are very pleased. And this is what's been driving the growth of the company, the performance of the company.

[Operator]

Since there are no more questions, I'd like to give the floor to Mr. Márcio for the final remarks. Please, you may proceed.

[Márcio Kaufman, executive]

Thank you for your presence to you all. It has been a quite interesting year to us. We've been learning a lot and evolved as a company. I'd like to thank you all, and I wish you a very good day, and I wish you a very good weekend.

[Operator]

The Vivara earnings conference call has ended. We thank you all for your participation, and wish you all a very good day.