Advertise with fastmoving.co.za
 
 

The group expects many of its categories ‘to have low, or even negative, growth rates until there is a meaningful improvement in the economy’.
The group expects many of its categories ‘to have low, or even negative, growth rates until there is a meaningful improvement in the economy’.

Spitz owner AVI says footwear sales walked all over its results

RETAILER NEWS

By Nick Hedley - Mar 12th, 10:27

AVI, whose brands include Bakers biscuits and seafood business I&J, said on its footwear businesses struggled the most in the six months ended December. 

Revenue from the group’s footwear and apparel operations, which include the Spitz and Green Cross brands, decreased by 9.2% to R1.1bn while operating profit fell 20.9% to R270.8m.

That weighed on the group’s interim numbers. Group revenue declined 3.2% to R7.1bn, while profit after tax declined 6.5% to R994m.

AVI said footwear sales volumes within Spitz fell 8.2%, even though the selling prices of core ranges had not been increased since April 2016.

“Consumer demand was subdued and the business was not able to repeat last year’s record December sales performance,” AVI said.

Revenue from Green Cross fell 20.4% largely due to lower sales volumes, the group said.

“Sales volumes were impacted by soft demand and widespread discounting in the midprice comfort footwear segment, exacerbated by poor performance of the summer range in retail doors.”

In November 2018, Green Cross launched a consultation process with affected employees following an in-principle decision to stop all manufacturing operations at its facility in Epping, Cape Town.

Restructuring provisions of about R15m had been included in the interim results, AVI said.

Green Cross recorded an operating loss of R18.8m, compared with a profit of R4.4m a year before.

Meanwhile, AVI’s Snackworks unit grew revenues 3.8% to R2.3bn, although operating profit decreased 5% to R429m.

I&J’s revenue decreased by 2.1% to R1.2bn.

AVI said the trading environment was expected to remain difficult, with constrained consumer spending.

“Our expectation is that many of our categories will continue to have low, or even negative, growth rates until there is a meaningful improvement in the economy.”

However, the group said there was “a reasonable prospect of a stronger second semester” if current sales volumes were sustained and I&J’s catch rates remained in line with forecasts.
Business Live 

Read more about: sales | retailer | retail | footwear | business | avi

Related News

How retailers can add value for consumers in turbulent economic times
25/03/2019 - 15:51
For the most part, it has been a dismal year for South African retailers; elevated household debt, higher fuel prices and an increase in value-added tax squeezed consumer spending. However, Ackermans, South Africa’s longest standing value retailer, performed well over 2018 reporting growth of just over 10% which is three times more than the industry benchmark.

Confusion around best-before dates causing unnecessary waste
25/03/2019 - 11:14
Confusion around best-before dates is widespread, causing unnecessary food waste. And in a country that's already food insecure, binning good food is not only unconscionable, it's plain wrong.

Watches of Switzerland sets its sights on more US acquisitions
25/03/2019 - 09:38
Watches of Switzerland expects to make further acquisitions in the US, which it first entered in 2017 with the purchase of jeweller Mayors, its CEO said.

Load shedding threatens jobs, economic recovery, says consumer body
22/03/2019 - 13:31
Load shedding, which has been escalated to Stage 4, is posing a significant risk to economic recovery, the Consumer Goods Council of South Africa said in a statement, as rotational blackouts continued to grip the country.

Pick n Pay introduces blood oranges to its fresh produce offering
22/03/2019 - 10:19
Fruit lovers no longer have to travel to Europe to taste the goodness of blood oranges. Pick n Pay has added rare blood oranges to its fresh produce offering making it the first retailer to offer this unique fruit to customers.