Shoprite’s furniture division experiences buoyant December
Festive season spending has helped Shoprite Holdings grow sales by 12.2% for the first six months of trading, with the OK Furniture brand coming out as the best performer in the stable. Shoprite Holdings currently operates a total of 368 furniture shops which added 49.6% to trading profit in 2014. Trading profit was N$5.7 billion marking a 6% increase, EBITDA rose comfortably to N$7.6 billion or an 8.8% increase while turnover was up 10.5% grossing N$100 billion, a first in the history of Shoprite Holdings according to Chief Executive Officer Whitey Basson. He said, “The year to June 2014 was one in which we invested heavily in the future of the Group in anticipation of the next upswing in the economy and achieved more than N$100 billion in turnover for the first time.
Market share increased for the 8th consecutive year. The Group invested in a net 125 new corporate stores and also in the supply-line infrastructure to support them. A turnover growth of more than 10% is no small achievement, given prevailing trading conditions.”
Six months into trading and turnover already equates to N$57.5 billion, up from N$51.1 billion reflecting a 12.5% increase against the comparative period in January 2014. Despite a strong performance emanating from the furniture division, the trading environment remains tough according to Shoprite Holdings Divisional Director, Aubrey Karp.
Karp highlighted that furniture store consolidations would be affected as the group takes account of its high debt exposure and the lack of consumer spending power reflected in the high level of indebtedness of 75% as reported by the National Credit Regulator of South Africa. Investment priorities are being shifted to the rest of Africa as the profitability of stores in South African stores improve. N$1.5 billion will be geared toward capturing the market outside of South Africa as the group banks on a population explosion predicted by the United Nations Department of Economic and Social Affairs. Proof of the investment is the fact that 30 store openings will be confirmed before the close of the financial year, 10 more than was registered in 2014.