Pepkor held back by late start to school year

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Pepkor held back by late start to school year

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Published Date: 2020-01-27 | Source: Stephen Gunnion | Author: Stephen Gunnion

Pepkor held back by late start to school year

The late start to the school year meant many parents put off buying new uniforms until January.

Pepkor says it grew first-quarter sales by 7.6% as it increased its share of the local clothing, footwear and homeware markets and raised its prices. However, sales were held back by the late start to the school year, with many parents opting to buy new school uniforms in January rather than December. It said this was confirmed by double digit sales growth during the first three trading weeks of January.

In a trading update for the three months to end-December, the retail group said sales rose to R20.9 billion. Revenue from clothing and general merchandise increased by 5%, with its Pep and Ackermans brands growing sales by 6.4% and 3.2% on a like-for-like basis. Despite retail selling price inflation of 9.1% in core categories, it said the two retail chains maintained their leading price positions in the discount and value markets.

Outside SA, it said Pep Africa was affected by depreciating currencies in Angola, Nigeria and Zambia, which impacted consumer affordability. Constant currency sales declined by 2.8% and like-for-like sales fell 6.4% and were 12.7% lower in rand terms.

Its Speciality division, which includes John Craig, Refinery, Tekkie Town and Shoe City, delivered a 1.6% rise in sales, with the like-for-like comparison reducing by 0.6%. Tekkie Town continued to focus on improving stock-holding and other inefficiencies in the business which continued to impact its performance, it said.

Despite successful Black Friday promotions in November, furniture, appliance and electronics division JD Group reported a 2.2% increase in retail sales, with like-for-like sales dipping by 0.7%. Its brands include HiFi Corporation and Russells, amongst others. The Building Company reported a decline in sales and like-for-like sales of 4.1% and 2.9% respectively.

The Fintech segment reported revenue growth of 44.4%. This includes the contribution from unsecured credit provider Capfin following the internalisation of its credit book funding which wasn't included in the comparative quarter.

Pepkor said it didn't expect any improvement in the macroeconomic and employment landscape in the near term.

Its shares closed 1% up at R16.72. Parent Steinhoff International rose 3.7% to 85c.





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