Magazine Luiza : Notice to the Market - Acquisition of a technology startup Softbox

MAGAZINE LUIZA S.A.

Publicly-Held Company

Corporate Taxpayer's ID (CNPJ/MF): 47.960.950/0001-21

Company Registry (NIRE): 35.300.104.811

NOTICE TO THE MARKET

Acquisition of a technology startup:

Softbox

MAGAZINE LUIZA S.A. ("Company") , in compliance with article 157, paragraph 4, of Law 6,404, dated December 15, 1976, as amended, to the Instruction of the Brazilian Securities and Exchange Commission ("CVM") No. 358 of January 3, 2002, as amended, and to article 6.6.1 of the BM & FBOVESPA Novo Mercado Regulation, hereby informs its shareholders and the market that, on December 13, 2018, the Company acquired the following technology companies: Softbox Sistemas de Informação, Certa Administração and Kelex Tecnologia (collectively known as, "Softbox").

Founded 13 years ago in Uberlândia (MG), Softbox has 256 employees, including 174 developers and product specialists. The company offers technology solutions to analog retailers and consumer goods companies that wish to digitize their operations. The vast majority of Brazilian companies are still excluded from the digital world due to a lack of resources and expertise to develop their own technology. With the aid of Softbox, Magalu will be able to help analog retailers and consumer goods companies transform into digital businesses.

The Softbox acquisition will allow Magalu to partner with retailers and consumer goods companies every step of the way: from price optimization, to marketplace sale, to last mile delivery. This type of comprehensive service offering is known as Full Commerce and it marks a new phase in the evolution of Magazine Luiza, transforming the company from a multichannel retailer to a digital platform built upon technology, data and digital processes.

The Uberlândia-based company is not the first startup acquired by Magalu to accelerate the creation of the platform. Three startups were acquired in just over a year: Integra, which specialized in integrating sellers into marketplace platforms; Logbee, a logistics technology startup; and now Softbox.

These acquisitions also help Magalu bolster the Marketplace and other initiatives, such as Magalu Entregas (deliveries) and Magalu Pagamentos (payments). Magalu is becoming a digital platform whose purpose is to digitize the retail and consumer goods industry and, thus, to contribute to the digitalization of Brazil.

Softbox currently has around 80 customers, including companies such as Unilever, Coca-Cola, BASF and Red Bull. Its developers are based in Uberlândia (MG) and São Carlos (SP), important technology hubs for engineering and product professionals. The company will be integrated into Luizalabs, Magalu's technology development arm. Luizalabs will have more than 700 developers and product experts, distributed across four technology hubs: São Paulo, Franca, Uberlândia and São Carlos.

In conjunction with it's advisors, the Company is evaluating whether the transaction is subject to the terms of article 256 of the Brazilian Corporation Law. In the event that it is, the Company will hold, within a period of thirty days from the closing date of the operation, an Extraordinary Shareholders' Meeting, with the purpose of ratifying the acquisition, giving dissenting shareholders the opportunity to exercise their right of withdrawal, in accordance with the prevailing legislation.

São Paulo, December 14th, 2018.

Roberto Bellissimo Rodrigues

Chief Financial Officer and Director of Investor Relations

About Magazine Luiza

Magazine Luiza, or Magalu, is a technology and logistics company focused on the retail sector. From its humble origins as a traditional retailer providing electronics and home appliances to Brazil's rising middle class, the company has since transformed into a technology powerhouse providing a wide array of products to Brazilians of all classes. Magalu has one of the largest geographic footprints with twelve distribution centers serving a network of over 950 stores encompassing over 75% of Brazil's GDP. At the heart of the company's success is an omnichannel retail platform capable of reaching customers via mobile app, web and physical stores. A large part of the company's success is attributable to its in-house development team, Luizalabs, which consists of over 700 engineers and product specialists. Among other things, engineers from Luizalabs use technologies such as big data and machine learning to create logistics, fintech and inventory apps which remove friction from the retail process, improving margins, delivery times and customer experience. The company has been at the forefront of e-commerce adoption in Latin America and its e-commerce operation currently accounts for over 36% of total sales. Magazine Luiza has also been a logistics pioneer. The company's integrated online and offline logistics operations enable it to leverage its physical presence to radically reduce delivery times and costs in a sustainable way. The result is the fastest, lowest cost logistics network in Brazil.