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Mr Price to increase its trading space
Mr Price to increase its trading space

Mr Price to increase its trading space


Business Day - May 24th 2012, 12:56

Fashion retail chain Mr Price hoped to extend trading space by 5% in the coming year and was set to launch an online store to grow market share, it said in its results for the 52-weeks ended March, released yesterday. 

The owner of Miladys, Sheet Street and Mr Price Home will open about 70 new stores and expand highly performing stores and reduce the size of poorly performing stores, it said.

The company warned it would need to increase investment in supply chain and information technology to match the complex needs of its growing business.

Last year CEO Stuart Bird said the group would focus on "internationalisation". The company opened a store in Nigeria during the period and planned to open one in Ghana next month.

Its past financial year consisted of 52 trading weeks, against 53 weeks over the previous period.

Good performances from its apparel divisions combined with a strong performance from its home-ware division grew sales 10,2%. Sales excluding new stores rose 8,2%.

Other revenue grew 23,3% thanks to a 47,8% rise in income from the sale of financial services and a 20,3% increase in interest on trade receivables. Continued focus resulted in costs increasing 8,8%, a rate lower than the sales growth, the company said.

The apparel division, which accounts for more than 70% of group sales and consists of Mr Price, Mr Price Sport and Miladys, increased sales and other revenue by 13,7% to R8,7bn, with comparable sales up 10,6% and retail selling price inflation of 4,6%.

The home division ( Mr Price Home and Sheet Street) increased sales and other revenue by 10,7% to R3,4bn, with comparable sales up by 9,5% and retail selling price inflation of 5,9%.

Nedbank Securities retail analyst Syd Vianello said the company’s results were in line with guidance it had given.

"The home division made a strong recovery and improvements were made in Miladys and Mr Price apparel." He credited the rationalisation of the store base, but suggested it could be the first sign that there has been a fundamental shift in the market, putting Mr Price in the lead.

Mr Vianello said the company had got its fashion right and reaped the benefits of consumers down-trading. "The numbers are also ahead of Stats SA retail numbers and that of the Retailers Liaison Committee sales growth data," he said.

Earlier this month, Statistics SA said retail sales fell 1,2% in the first quarter of the year.  

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