SALT RIVER-based fashion retailer Rex Trueform managed a stylish performance in the half-year to end December with revenues up 7% to R296m and after tax profits up a smart 10% to R19m. CEO Catherine Radowsky stressed that trading expenses – a key area of focus in an economically depressed environment – were contained and increased by less than 5%.
She said Rextru’s main operating segment – the Queenspark retail chain – increased turnover 6,5% to R286m, while the all important gross profit margin increased marginally to 55%.
Radowsky said key business initiatives introduced included a recent implementation of a new enterprise resource planning (ERP) system at the head office and distribution centre. She explained that Queenspark was in the process of rolling out the new point-of-sale system (connected to the ERP system) at its retail stores.
Looking ahead, though, Radowsky reckoned the clothing retail market would remain under pressure. She warned that the cost of goods imported were subject to the weakening of the Rand.
“Going forward the weaker Rand will likely put pressure on gross margins.”
Radowsky said initiatives being considered and introduced were mainly focussed on turnover growth. “These are predominantly aimed at improving the performance over the medium- to long-term.”
She said the recent implementation of the ERP system was expected to provide benefits in the 2017 financial year. Interestingly Queenspark started selling its product online through the Zando website. Radowsky said this was part of the company’s strategy towards servicing a larger customer base and was already showing signs of potential.
In other retail developments amongst Cape Town-based companies, empowerment group Brimstone and iconic fashion retailer Foschini have also taken serious strides in reinforcing new strategies.
Brimstone seems to be cautiously emulating the manufacturing-to-retail model opted by Rextru with its clothing manufacturing subsidiary House of Monatic (HoM.) This is perhaps not terribly surprising since Brimstone is a large shareholder in Rextru, which has cast off its clothing manufacturing assets to concentrate of retailing endeavours.
HoM’s revenue increased 17% to R214m with net profit coming in at a respectable R6,4m as the company increased its share of corporate wear and retail footprint.
HoM has now supplemented its factory shops with standalone retail boutiques – which allow a better utilisation of production capacity at the manufacturing facilities. Brimstone CEO Mustaq Brey said another three retail stores were opened during the 2015 financial year with two more planned for later this year.
Foschini, on the other hand, continues to look further afield for new growth opportunities. Recently the company advised it had acquired – via its UK subsidiary Phase-Eight – the niche fashion business of Whistles, a British contemporary fashion brand for men and women.
Whistles has 46 standalone stores in the UK and is stocked in selected departmental stores across the world - including Bloomingdales in the USA and Harrods in the UK.
By Jenni McCann