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

Brands leave R34 bn in lost sales on the e-commerce table - report
22/09/2019 - 13:19
By 2021, over 20-million South Africans will shop online.

AB InBev to float Asian business in 2019’s second biggest IPO
22/09/2019 - 10:14
AB InBev will kick off a second attempt to spin off its Asian business in Hong Kong with the launch of an initial public offering (IPO) worth up to $6.6bn that could be the world’s second-largest flotation in 2019.

Samsung and KOO win big at the 21st Sunday Times Top Brands Awards
20/09/2019 - 15:12
Samsung and KOO have been announced as South Africa’s Overall Favourite Brands, winning the Grand Prix Awards in the respective Business and Consumer sectors of the 21st Sunday Times Top Brands Survey.

Retail sales remain muted with consumers under pressure
20/09/2019 - 14:31
Retail sales for July marginally declined to 2 percent year on year as sales growth continued to reflect a muted demand in South Africa, with consumers’ discretionary income under strain.

Pick n Pay rolls out R4 lifetime reusable bag made from recycled plastic bottles
20/09/2019 - 14:14
Pick n Pay is rolling out its new budget green People n Planet reusable bag nationally after a successful trial with customers earlier this year. The bag is expected to be in all stores by mid-October.