In yet another indication of the changing and highly competitive times in the South African retail sector, the long-established Stuttafords chain has entered business rescue after many years of declining sales and low profitability.
Business rescue enables a company to keep trading while a professional business rescue practitioner takes control, together with the board of directors, to provide a fresh perspective and new direction. If this revised strategy fails, the next step is usually liquidation.
Stuttafords was founded in 1858 and sells branded clothing, shoes, accessories and cosmetics, mainly in a large-format department store environment. It has 18 outlets in SA, Namibia and purchase zithromax online
Speaking to ‘The Money Show’ radio programme last night (Monday), Stuttafords CEO Robert Amoils said negative consumer sentiment was driving people away from retail stores and shoppers were tending to buy down rather than go for the higher-priced international brands that Stuttafords offers.
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chain’s department stores had tended to be relatively resilient. “But the foot traffic in malls is declining and spend per head has dropped – especially in those malls that are undergoing refurbishment.”
In the fashion space, Stuttafords once focused on selling house brands with high margins, but then changed its strategy to selling primarily international brands such as Banana Republic, Tommy Hilfiger and Pringle of Scotland. Price-wise, these have all suffered as a result of import duties and the devaluation of the rand.
Recently the Edcon Group – which includes Edgars, Jet, CNA and Boardmans – narrowly avoided business rescue and was taken over by creditors.
Not all South African retailers are enduring tough times, however. Clicks Group, for example, delivered a strong trading performance in the year to August, increasing retail turnover by almost 13%, mainly due to good performance in the health and beauty segments.