By Brazil Stock Guide – Magazine Luiza (B3: MGLU3) is turning its multichannel vision into something tangible. The company is finalizing the Galeria Magalu, a flagship space on São Paulo’s Avenida Paulista that merges store, theater, art gallery, and influencer studios. The official opening to the public will take place after Black Friday 2025, but the venue will already serve as the stage for Magalu’s Black Friday live broadcast, in what CEO Frederico Trajano calls “the meeting of the future and the past” of Brazilian retail.
Store, stage, and media hub in one
The Galeria Magalu brings together the company’s main brands — Kabum, Netshoes, Época Cosméticos, and Estante Virtual — under one roof. The site preserves the original theater and adds an art gallery, interactive areas for influencers and streamers, and brand-specific experience zones. It will also host the YouTube Theater, debuting with Magalu’s Black Friday show before the venue opens to the general public in the following weeks.
More than a flagship, the project is designed as a media and experience hub. Partner brands will be able to use the space for displays, activations, and live content. Trajano said about 150 partner brands, including Apple, Samsung, Intel, AMD, Adidas, Asics, Chanel, and Dior, have already signed on. Advertising and sponsorship revenues have already covered a large part of the investment, validating the model of the store as a media asset.
“We’re creating a space that represents the meeting of retail, culture, and technology,” Trajano said during the company’s third-quarter 2025 earnings call.
Analysts probe investments and AI strategy
During the Q&A, analysts pressed the company for details on 2026 investment priorities and how AI fits into Magalu’s next strategic phase. Trajano said the company will keep capex aligned with depreciation, focusing on technology, cloud, and artificial intelligence. He highlighted the rollout of AI Commerce on WhatsApp, allowing customers to browse, purchase, and pay without leaving the app — a global first that’s already delivering three times higher conversion rates and an NPS of 90.
Ricardo Garrido, head of marketplace operations, said Magalu will stay disciplined on profitability and avoid unsustainable free-shipping battles. The company’s Fulfillment by Magalu model now accounts for 28% of 3P sales, with 80% of deliveries offering free shipping supported by Magalu’s nationwide store network. He also unveiled VAPT, a new same-day delivery platform linking sellers and carriers, already used by 600 merchants and 23 logistics partners, with conversion rates 30% higher than FULL.
Logistics and finance underpin resilience
Fabrício Garcia, vice president of operations, said the company runs 18 distribution centers and 1,245 stores with active inventory, backed by AI-powered supply systems that improve product allocation and cut logistics costs. This integration between 1P and 3P allows Magalu to sustain healthy margins even in a competitive landscape.
CFO Roberto Bellissimo and executive Jörg Hecker pointed to solid growth in the company’s financial arm, with LuizaCred posting R$68 million in profit and non-performing loans (NPL) down to 8%, the lowest on record. The newly launched MagaluPay, operational since August, already accounts for 10% of in-store consumer credit (CDC). The structure brings tax efficiency, replacing the 18% ICMS with a 3% IOF, and improves working capital by transferring receivables from retail to the financial entity.
AI and multichannel integration define Magalu’s next cycle
Asked about the long-term strategy, Trajano said Magalu is entering its third strategic cycle, focused on AI and total multichannel integration. The previous cycles centered on digitalization (2016–2020) and diversification of revenue (2021–2025). Both the Galeria Magalu and the AI Commerce initiative are milestones of this transition.
“The future of retail isn’t online or offline — it’s where both meet,” Trajano said. The company plans to replicate the Galeria model across 40 to 50 large stores nationwide, converting spaces over 4,000 square meters (43,000 sq ft) into hybrid experience and media hubs.
By turning the Galeria into a revenue-generating showcase, Magalu is redefining what a physical store can be: a stage for brands, a platform for creators, and a laboratory for data-driven retail. In a high-interest, high-competition environment, the company bets that integration across technology, finance, and physical retail will remain its strongest competitive edge.
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