45 of 2022

                            Newsletter No 46/2 December 2022                                 

                  

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Shoprite to test the waters for clothing

By Katharine Child

An inside look at one of Shoprite’s Outdoor camping stores. Picture supplied

Grocer to start small with low-risk venture in standalone shops

SA’s biggest grocer Shoprite is continuing its expansion into SA retail, and will open 10-12 clothing stores next year — having recently launched a low-cost banking service and branched out into pet, camping and baby goods stores.

The Checkers and Usave owner is able to use its existing delivery and warehouse network that reaches thousands of grocery stores to add products and revenue streams in an increasingly weak economy.

As consumers spend less, brands are trying to sell them extra goods by diversifying as much as possible.

The decision to have standalone clothing stores was mentioned in a recent investor call, but few details were given, other than that stock has been bought and shopping sites identified.

CEO Pieter Engelbrecht said during the call the planned opening date was in March.

The clothing market is becoming crowded and recent financial results from Mr Price and Pepkor (which owns Pep and Ackermans) suggest these chains are selling fewer clothes than in previous financial years, as consumers face rising interest rates and petrol, power and food price hikes.

As a result of these headwinds clothing chains are struggling to grow, and in some cases are going backwards, which could weaken their share prices and reduce profit.

“It’s been a tough period for trading,” said Mr Price CEO Mark Blair last week at the group’s interim results.

However, Engelbrecht said the clothing launch is a low-risk venture. “We will start small and we will build slowly. We have this philosophy at Shoprite; fail fast. If we feel it takes too much effort and doesn’t give the return, we move on.”

All Weather Capital portfolio manager Chris Reddy said there is “increased competition in the value space” and the group will be closely watching the Shoprite rollout.

Engelbrecht told investors Shoprite has a vision of being the only tenant in a strip mall with a standalone baby store, a Checkers outlet, a liquor store, a MediRite pharmacy and clothing, furniture, camping and pet stores.

At the new Oceans Mall in Umhlanga, KwaZulu-Natal, it recently opened a new Checkers supermarket, a baby store, a pharmacy, pet shop, liquor store and a specialist outdoor outlet.

Shoprite has taken most clothes on offer out of its large Checkers Hyper Stores as it thinks consumers prefer to visit standalone clothing stores. Customers do not want to place a shirt they are buying “on top of their chicken”, Engelbrecht said.

Shoprite is increasingly competing with many SA businesses, even banks, with its bank account aimed at the lower-income consumer, who prefers knowing companies they owe money to cannot add debit orders to the account. This is a feature being advertised on the Shoprite account

Dis-Chem bought retailer Baby City’s 35 stores in 2020 and Clicks has opened four standalone baby stores to showcase large equipment such as strollers, which it mostly sells online, with six more stores planned over the medium term.

Some Checkers stores sell baby strollers and car seats, as well as baby goods, putting them in direct competition with Clicks and Dis-Chem.

Its decision to open pet stores came after people bought more pets during the pandemic and because it could not sell high quality pet food at Checkers. Premium pet brands only sell food at pet stores and veterinarians, Engelbrecht has said.

In its own move to add products and increase sales, Pick n Pay this month launched a website to sell homeware including televisions, kettles, trampolines and battery operated lights with free delivery of purchases of R500 or more and extra loyalty points on offer. This puts it in direct competition with Naspers’s Takealot and Massmart’s Game and Makro online stores.

Competition

Shoprite’s move into clothing will mean it could find itself competing with the much larger Pick n Pay clothing brand, of which there are more than 300 stores.

In its six months to August, Pick n Pay described its clothing brand as “an avenue for growth” with the planned opening of 39 more stores by March, its highest number of new openings yet in a half-year period. While the clothing division grew sales 14.8% year on year in the six months to August 28, Pick n Pay does not report separate revenue and profit numbers for its clothing division so it is not clear just how much of the group’s income it accounts for.

The Shoprite investor call also detailed the exponential costs retailers face. Shoprite used to pay R6m for insurance coverage valued at R1.5bn. After the KwaZulu-Natal riots and large payouts, reduced its insurance coverage to R500m, which forced Shoprite to seek insurers abroad, Engelbrecht said. It will now have to spend R200m for R1.5bn in insurance, an increase of more than 3,000%.

Pick n Pay recently pointed out it has been battling rising security, insurance and diesel costs — as it relies more heavily on generators.  BD

Surf’s up: Mami Wata’s latest collection

By Nokubonga Thusi

Mami Wata SS22 Neo- Animism Luck Is Alive lookbook. Image: Supplied

The brand’s latest lookbook is a striking opus that is as visually unsettling as it is breathtaking

If your perfect summer involves chasing waves, make sure you’re kitted out in the coolest African surf brand around — Mami Wata. The brand’s latest lookbook, SS22 Neo- Animism Luck Is Alive, in collaboration with renowned South African photographer and part-time surfer Pieter Hugo, is a striking opus that is as visually unsettling as it is breathtaking.

Exploring the concept of distortion and reflection, mirrors and digital manipulation are used to convey the spiritual connection between African surfers and the ocean. Mami Wata’s signature eye and dice motifs feature throughout the collection of relaxed-fit cotton shirts and surf trunks, inspired by the concept of luck and the effect of animism on West African graphic design.

“Working on projects like this has such a different energy to when I’m making more personal work,” Hugo said about the collaboration. “With this, we work as a team: all of us doing our best to achieve the highest quality we can with whatever resources we have at hand. With my personal work, the rhythm is slower and the pursuit more solitary. But I love both. They feed into each other. As I get older, I have allowed myself to start feeling proud of my work. I am proud of this collaboration.”  

A bold evolution of Montblanc’s signature leather collection

By Nokubonga Thusi

Montblanc’s signature Meisterstück collection evolves with a line of elevated leather styles

Leaving on a jet plane anytime soon? Then the bags you should be packing are some of the luxury leather pieces from the covetable Montblanc Meisterstück Collection. Inspired by the house’s iconic Meisterstück pen, the capsule collection is fashioned from crocodile-embossed leather in matte black, grey, and Britishgreen colourways.

Staying true to Montblanc’s writing heritage, the designs incorporate Meisterstück pen- inspired elements such as nib-shaped zip pulls. Any one of these pieces will elevate your travel experiences. Choose from duffle bags in three sizes, a document case, messenger bag, pouches, and card holders — or really spoil yourself and grab the whole set. 

HomeChoice – board changes

Shareholders are advised of the following changes to the Company’s board of directors (“Board”):
• Mr Gregoire Lartigue (“Greg”) has informed the Board of his intention to resign from his role as executive director and HiL Investco Chief Executive Officer (“HiL InvestCo CEO”) with effect from 15 December 2022; and
• Ms Amanda Chorn (“Amanda”) has also informed the Board of her intention to resign from her role as independent non-executive director and member of the Audit and Risk Committee with effect from 15 December 2022.

The following changes were proposed and accepted by the Board, effective 15 December 2022:
• The appointment of Mr Sean Wibberley (“Sean”) as executive director of the Board and to the role of HiL InvestCo CEO, to replace Greg, whilst retaining his role as Chief Executive Officer of the Finchoice division of the Group;
• The appointment of Mr Roderick Phillips (“Rod”) as an independent non-executive director, to replace Amanda. Rod will maintain his role as Chair of the Weaver Fintech subsidiary;
• The amendment of the composition of the Audit and Risk Committee, Social and Ethics Committee and Remuneration and Nominations Committee as follows:
o Ms Marlisa Harris will remain an independent non-executive director but will step down from her roles as Chair of the Audit and Risk Committee and Chair of the Remuneration and Nominations Committee, whilst remaining a member of both committees;
o Mr Pierre Joubert, lead independent non-executive director, will be appointed as Chair of the Remuneration and Nominations Committee;
o Rod will be appointed as Chair of the Audit and Risk Committee. Rod will also be appointed as a member of the Social and Ethics Committee, replacing Ms Shirley Maltz who was acting in an interim capacity; and
o Mr Paul Burnett will step down as a member of the Social and Ethics Committee and Sean will be appointed as a member replacing Paul.

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