HomeChoice’s operating profit up 9.8% to R280m
bdlive.co.za - Aug 31st 2016, 08:52
DIRECT shopping retailer HomeChoice managed to pull growth from its hat as revenue rose 15.8% to R1.52bn, despite the constrained consumer environment in which it trades.
In the six months to June, SA’s largest home-shopping retailer reported that its operating profit had increased 9.8% to R280.4m.
The group’s pan-African sales increased 27.9%, amounting to 11.6% of total sales, and making it higher than its domestic market.
HomeChoice CEO Shirley Maltz said that in the past year, the company had been doing quite a big push outside SA.
"There has been quite a big focus on the digital strategies; we have a slightly higher proportion on digital sales that we did locally … from a digital perspective, and that’s proven to be quite successful," she said.
Digital has been HomeChoice’s fastest-growing channel in the past four years, as credit extended via digital channels increased 26.6% for the six-month period, representing 11.6% of sales.
Malta-based HomeChoice International is the holding company of subsidiaries HomeChoice and FinChoice, which sell homewares merchandise, personal technology, and loan products to its Living Standard Measure (LSM) 4 to 8, mass market customer base.
Women constitute 84% of the company’s customers.
Maltz said that the group’s financial services have had a "tough couple of months", but were trading well, "so I am comfortable with where they are".
The group’s financial services revenue for the period rose 18.8% to R277m, compared with R233m the previous year.
The retail arm of the business operates primarily on credit, with 90% of its sales being on credit. However, Maltz said that given the affordability regulations and the fact that customers struggled to get to grips with the company’s processes, the acceptance rate had declined.
"We are all in a tough environment in SA and we are going to remain in a tough environment for a long time.
"How we look at it is that, ‘She’s always shopping somewhere … she might not be shopping as much as she used to, but she is always shopping’," Maltz said.
The home shopping retailer sells a range of households goods, including bedding, furniture, and appliances.
Its products are also sold through call centres, sales agents, and by mail order.From DFM Publishers (Pty) Ltd
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