Casas Bahia enters court-supervised restructuring

Grupo Casas Bahia has filed a petition for judicial recovery in the São Paulo bankruptcy and judicial-recovery court, placing the Brazilian retailer under court-supervised restructuring. The move is intended to address liquidity pressures by allowing the company to negotiate terms with creditors within a formal judicial framework. Judicial recovery enables the group to propose a restructuring plan while maintaining operations, subject to court approval and creditor negotiations.

In the documentation submitted for the process, Casas Bahia listed approximately R$17.3 billion in liabilities it seeks to renegotiate. These obligations form the core of the restructuring effort and will be central to the discussions with financial and commercial creditors. The filing follows a period of operational adjustments as the group attempts to realign its cost structure and balance sheet.

For the second quarter of 2026, Casas Bahia reported a net loss of about R$10.1 billion. This figure reflects a substantial impact from roughly R$9.1 billion in non-recurring, largely non-cash charges recognized during the period. These one-off items significantly widened the headline loss compared with the company’s underlying performance.

Excluding these non-recurring charges, the retailer’s adjusted loss for the quarter was about R$978 million. The combination of a large reported loss and sizable adjusted deficit highlights the company’s ongoing profitability challenges. The financial results provided a key backdrop to the decision to seek judicial recovery and restructure its debt.

Ahead of the court filing, Casas Bahia had been implementing a turnaround plan focused on resizing its operations. As part of this plan, the company closed 298 stores, reducing its physical footprint in an effort to cut costs and improve efficiency. These closures represent a significant adjustment to the retailer’s brick-and-mortar network.

The group also dismissed roughly 3,000 employees in its latest round of operational changes. These workforce reductions accompany the store rationalization and are aimed at aligning personnel costs with the smaller store base and current sales environment. Together, the closures and job cuts illustrate the depth of the restructuring already under way at the operating level.

Financial markets reacted sharply to the disclosure of the second-quarter loss and the judicial-recovery petition. On August 17, 2026, Casas Bahia’s shares fell by more than 30% in early trading. The stock moved to a range around R$0.45–R$0.48, down from prior levels of about R$0.66.

The steep decline reflects investor concern over the scale of the losses and the magnitude of the liabilities being renegotiated under the court process. With the shares trading at significantly lower levels, equity investors face increased uncertainty while the company works through its restructuring plan with creditors under judicial oversight.