Steinhoff sales impacted by Covid-19


Steinhoff sales impacted by Covid-19

Published Date: 2020-03-23 | Source: Stephen Gunnion | Author: Stephen Gunnion

Steinhoff sales impacted by Covid-19

While supply chain disruptions are easing, the retail group says turnover will be impacted as European countries restrict trading.

Steinhoff International says it has had to close some of its European general merchandise stores or restrict their trading hours due to strict measures taken by governments to contain the spread of the Covid-19 pandemic.

In an update on Friday, the retailer said markets affected included France, Spain, Poland and the Czech Republic. It said demand for its goods had been affected by significant restrictions on movement and public gatherings in Europe, and the closure of commercial facilities. As a result, turnover had reduced, particularly in general merchandise, and this would continue for the duration of the restrictions. It said the performance of businesses focused on fast-moving consumer goods had been more resilient, partially offsetting the impact.

The group said while there were still some delays in sourcing products for its chains, these were reducing and it continued to offset the impact through mitigation strategies. Last month, it said factory activity in Asia was negatively impacted by the virus but its supply chain was diversified and flexible enough for it to put alternative sourcing and other arrangements in place. More recently, it said affected factories had reopened and were rebuilding capacity.

It said its operating companies were implementing plans to strengthen their cashflows by managing their forward purchase order commitments and, where appropriate, switching to flexible working contracts. It was also taking action to cut back operating expenses, reduce stock of goods impacted by the trading restrictions and make use of tax payment and other government relief measures where available.

Its shares closed 10% down at 79c on Friday.

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