22 of 2018


Newsletter No. 22                                                                                     15 June  2018

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How Mr Price plans to join Poland’s retail show

By Nick Hedley

Mr Price plans to enter the Polish market by November, the company’s second foray into the northern hemisphere, after entering Nigeria in 2012.

The group will join a handful of other JSE-listed property and retail companies with a presence in Poland, which is eastern Europe’s biggest economy.

Steinhoff’s Pepco has found success in that market, Spar Group is in discussions on a potential acquisition there, while property counters including Echo Polska Properties, Growthpoint and Nepi Rockcastle have interests in Poland.

Mr Price CEO Stuart Bird said on Friday that the retailer would open a test mrphome store in Poland in late October or early November.

The country was attractive because of its growing middle class and healthy economic growth prospects, Bird said.

Testing the market with a mrpHome brand was easier than using an apparel store, as the latter would involve “seasonal complications”.

Mr Price tends to take a circumspect approach when entering new markets. In 2003, the retailer closed six test stores in Chile, while it is testing mrpHome and apparel stores in Australia. The group has consolidated its three apparel stores in Australia into one.

“They have taken a very conservative approach to store rollout in Australia and we expect to see something similar with regards to Poland,” said Bjorn Samuels, an equity analyst at Argon Asset Management.

“While we question all the recent Polish and other eastern European acquisitions or expansion plans by many JSE-listed companies, we believe that a low seasonality mrpHome pilot store in Poland provides Mr Price with a low-risk entry point into a high growth European economy with positive fundamentals,” Samuels said.

Bird said Mr Price would also refocus on its rest-of-Africa operations after “addressing” the South African business.

It would venture into new territories and planned to open a test Sheet Street outlet in Zambia, he said.

Mr Price said on Friday its revenues rose 8% to R21.3bn in the year ended March, while profits after tax increased 22.9% to R2.8bn.

While Bird said this was “a solid performance”, he said trading conditions in the group’s home market were expected to remain tough in the new year to March 2019. “We certainly don’t expect buoyant trade this year. GDP growth is still going to be pretty subdued.”

Mr Price would focus on improving margins, he said.

Bird said Mr Price was likely to spend R550m on capital expenditure in the new financial year. It bought 12 Kenyan franchise stores in May and would open about 48 new stores through the year.

Vestact portfolio manager Byron Lotter said that while Mr Price had been ” in disarray” two years ago, management had steadied the ship. “They managed to get it together, rebound and continue to lead the South African clothing market. As a shareholder, the very worst thing to have done would have been to sell during the turmoil,” Lotter said in a note to clients.

Business Day

Some stands to look forward to meeting at Source Africa this year!

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Falke South Africa expands its global footprint

 Brothers Matt (left) and Brad Milne (right) with Falke Group General Manager Martin Grobbelaar and Keaton Quarmby, Group Marketing Executive, during a recent visit to Sydney.

Legwear specialists Falke South Africa will this month be expanding its global footprint, when they establish a retail presence in Australia.

According to Group Marketing Executive Keaton Quarmby, they have just returned from an extremely successful visit to Australia.  “There are definitively great similarities between the target markets here in South Africa and in Australia.  Our audiences share comparable lifestyles, which will provide a great fit for the FALKE brand.  We are continuously investigating opportunities to extend our market share and are convinced that this partnership will assist us in creating a brand presence in Australia,” said Quarmby.

The Australian endeavour will be spearheaded by former South Africans Matt and Brad Milne.  The Sydney-based brothers have been running a successful distribution company in Australia for the past five years.  The online shop will carry the Advance Performance range of sport-specific socks in the Run, Hike, Bike and Golf categories as well as a selection of everyday sports socks.

Falke South Africa is a subsidiary of the German textile giant, a fourth-generation family owned business that was founded in 1895.  The South African operation was established in 1974 and is widely recognised as a local market leader.  Falke South Africa currently manufactures approximately 7 million pairs of socks per year for the domestic and export market.

As a business, what should you do to deal with public liability claims?

Written by Ashleigh

You own a business and you put a sign up saying, “Park at your own risk” – which effectively amounts to a ‘contract’ – simply put, you are saying that anyone can enter your premises on that basis – if they don’t want to then they shouldn’t enter – and that you are not liable for any damages howsoever arising, whether due to your negligence or anything else.  The sign actually means nothing and offers a business no protection against public liability claims.

This can be contested in terms of Section 48 of the Consumer Protection Act (CPA) on the basis that ‘a supplier must not offer to supply, supply, or enter into an agreement to supply any goods or services on terms that are unfair, unreasonable or unjust (and here’s the kicker), they cannot require a consumer or any other person to waive any rights or assume any obligation on terms which are unfair, unreasonable or unjust.’

PJ Veldhuizen, Managing Director of Gillan & Veldhuizen, says that when dealing with consumers what businesses need to do is to ensure a contractually sound relationship between them and the consumer which promotes the objectives of the Consumer Protection Act.  This includes fair and reasonable treatment of consumers by suppliers when supplying goods and services.

There is a clear injunction in the legislation which requires a court or tribunal to interpret the provisions of the CPA purposively – by that, it means that a presiding officer when attributing meaning to any part of the legislation must do so in the light of the purpose which it seeks to achieve.  “For example,” says Veldhuizen, “any ambiguous provision in the act must be interpreted in favour of the consumer and although it may seem like an oversimplification of matters, the interests of consumers will generally win the day.”

When suppliers are wishing to consider the fairness of any provisions on which they seek to rely, they should consider who their consumers are, especially in relation to those consumers who could be considered vulnerable as result of poverty, illiteracy, age or any other vulnerability.

At store level, suppliers need to ensure that their staff are adequately briefed on how to deal with the public, are aware of the CPA, and know to whom they should refer any complaints.

If you work with clients or customers in public spaces, have visitors to your premises, or manufacture products, suppliers are encouraged not to simply rely on so called exclusionary clauses or signs which may have assisted them prior to the CPA and should now adequately insure themselves against claims.

While claims made against you may be opportunistic and ultimately unsuccessful, the costs of defending even spurious claims can be debilitating and these defence costs should also be insured against all public liability claims.

Veldhuizen adds that whilst it is often a David and Goliath game, there are many lawyers who are prepared to take on matters on contingency basis, i.e. a no-win-no-fee in circumstances where consumers have been injured and significant damages incurred. Veldhuizen, therefore, advises that when confronted by a public liability claim, one should always consider appointing a mediator to assess whether there is scope for alternative dispute resolution.

Without necessarily admitting liability, the purpose of mediation is to explore whether it is not simply an apology that somebody wants – furthermore, mediation will see you as being a responsible and worthy supplier, and will ultimately save the business money and preserve its reputation. Published in Politics, Law, Afts, Society

Did you know……..

Facekini, China

Sometimes new trends in the Fashion world arise due to the needs of the people, an example for this is the introduction of “Facekini”. A simple way to keep away from the harmful rays of Sun is to avoid going out, or to put on a good quality sunscreen. But the residents of China found a new way to protect themselves by wearing face-kini, according to name it is a shielding head mask wore by the beach-goers.

To Advertise………………….. Click here to see fact sheet with advertising rates. 

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