Lockdown costs Pepkor billions in sales


Lockdown costs Pepkor billions in sales

Published Date: 2020-07-27 | Source: Stephen Gunnion | Author: Stephen Gunnion

Lockdown costs Pepkor billions in sales

The retailer says sales have recovered strongly following the relaxation of lockdown restrictions and it plans to take advantage of its value offering as consumers trade down.

Pepkor says the national lockdown cost it an estimated R5 billion in sales after its stores weren't allowed to trade for the whole of April. However, the retailer says it achieved strong trade in May and June as restrictions were eased and due to pent-up demand, social grant payments and its position in the value end of the market.

In a trading update, the owner of Pep and Ackermans said revenue fell 1.5% in R52.3 billion for the nine months to end-June. It reported revenue growth of 6.5% for the first six months but a decline of 17.2% for the following three-month period. Clothing and general merchandise sales were down 1.7% for the nine months while furniture and appliances unit JD Group reported a 6% decline in revenue, with furniture sales only allowed to resume trading from June. Incredible Connection and Hi-Fi Corporation were also only allowed to sell limited ranges last month. The Building Company reported a decline in sales of 17.2% for the nine-month period.

The group said the strong trading momentum achieved in May and June had continued into July and it would continued to focus on its aggressive growth in market share as consumers were forced to reduce and priorities spending.

Last month, the group raised R1.9 billion through an accelerated bookbuild after selling 172.5 million new shares at R11 each, a 6.2% discount. It said the proceeds would be used to reduce its gearing. Processes to amend its debt covenants and extend its repayment profile were progressing well, it said.

Its shares declined by 1.3% to R10.54 on Friday.

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