Monthly Archives: November 2016
Dubai billionaire Mohamed Alabbar has signed a joint venture with online luxury fashion retailer Yoox Net-A-Porter Group.
The JV with Symphony Investments, an entity controlled by Mohamed Alabbar, will see the him focus his entire online luxury retail activity in the region exclusively through the new company.
The 130 million euro ($139 million) JV will establish on-the-ground operations, with dedicated sales and marketing, customer care and PR teams.
The company will also open a new distribution centre in Dubai powered by Ynap, which will include a premier same-day delivery service. It will also offer a localised offering ranging from Arabic-language customer care and content, as well as local currency and payment methods.
Ynap will hold a 60 percent stake in the JV, which will be fully consolidated in Ynap’s accounts, while Symphony Investments will own the remaining 40 percent.
The JV, which will initially operate in the GCC, will manage all of the group’s existing multi-brand online stores in the region – Net-A-Porter, Mr Porter, Yoox and The OutneT – as well as, in agreement with the brands, select existing and future online retail operations that have significant business potential in the Middle East. The JV may expand to other countries in the Middle East and North Africa in the future.
Alabbar Enterprises took a four percent stake in the Italian group in April this year with a view to expanding its operations in the Middle East
“The signing of a joint venture is really incredible for the fashion e-commerce market – which I think is a $10 billion market,” the businessman said during a panel discussion at the Arabian Business Digital Forum.
Noon.com, a $1 billion online shopping portal, will go live in January 2017. It will house over 20 million products.
Federico Marchetti, chief executive officer, Yoox Net-A-Porter Group said that the two companies were combining the strength of two regional player to tap the luxury market in the Middle East.
“This venture will brings unique and unparalleled experience of the two players and we will bring our know-how as a world class online retailer; likewise, Alabbar brings his immense knowledge of business and customer trends,” he added.
Marchetti praised Alabbar as a global “entrepreneur”, saying now he is now leading the digital revolution in the Middle East.”
Amazon said to consider acquiring Dubai-based online retailer for $1bn#Economy
Souq.com is known as ‘Amazon of the Middle East’
Amazon does not have big foothold in Middle East (Reuters)
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Amazon.com is in preliminary talks to acquire the Dubai-based online retail market Souq.com for about $1bn, according to a Bloomberg News report.
Souq.com, known as the “Amazon of the Middle East,” currently offers roughly 1.5 million products across the Middle East, primarily in the United Arab Emirates, Saudi Arabia and Egypt. Amazon does not have much of a foothold in the region.
In September, Souq.com hired banker Goldman Sachs to find potential buyers for at least 30 percent of the company, according to the Bloomberg report. Tiger Global Management and South Africa Naspers – the company’s primary investors – also may consider selling their shares, it added.
Big e-commerce ventures appear to be trending in the Middle East. Two weeks ago, Dubai business magnate Mohamed Alabbar announced the launch of a $1bn regional e-commerce site in a joint venture with the Saudi sovereign wealth fund and other Gulf investors.
Noon.com is to go online in January with a 50 percent investment from the kingdom’s Public Investment Fund and the rest from about 60 investors led by Alabbar, who also heads the emirate’s real estate giant Emaar.
He told a news conference that distribution centres are being set up in the Saudi cities of Riyadh and Jeddah, along with a giant warehouse the size of 60 football stadiums in Dubai.
“We expect to become a world player but will concentrate firstly on Saudi Arabia and the United Arab Emirates,” said the president of Emaar, the company that built the world’s tallest building, the Burj Khalifa in Dubai.
With an initial inventory of 20 million products, the online retailer aims to expand to Egypt, the Arab world’s most-populous state, at the end of next year or early in 2018.
Alabbar, cited by Bloomberg, said Noon would be traded on stock markets in five to seven years, and aims to be profitable within five years.
South African pharmacy chain Dis-Chem to double in size by 2022November 22, 2016 Written by Georgina Caldwell
South African pharmacy chain Dis-Chem to double in size by 2022
Dis-Chem has vowed to double in size over the next five years, according to a report published by Yahoo.
Ivan Saltzman, CEO of the South African drug-store chain, announced the ambitious growth plans as the retailer made its debut on the Johannesburg Bourse on Friday.
Dis-Chem plans to expand its store network to 200 outlets, double the 106 retail units it currently operates across the country.
“We will continue on the same trajectory… we’ve doubled since 2010 and we will double again in the next five years,” said Salzman.
In about 90 days, the largest mall in East and Central Africa will open its doors in Kenya.
The highly touted Two Rivers Mall in Nairobi’s posh suburb of Runda is set to open its doors to the public in February 2017, Centum Group – the company undertaking the multimillion dollar venture – CEO James Mworia has revealed.
Mworia said the Centum Group’s real estate development of “large scale mixed use” would include residential, commercial, retail, and hospitality offerings within the 100-acre precinct.
He made the remarks during a media walkabout at the site to introduce the local media to the mall, which boasts a total of 200 shops, both local and international.
Shops unique to Two Rivers Mall include international brands such as LC Waikiki (fashion apparel), Villeroy&Bosch (home zone), Swarovski (jewelery and accessories), Anmol Jewellers, Carrefour, and Azadea.
South African retailers such as Mr Price (apparel and home) and Woolworths are also among the foreign-owned companies set to open mega shops at the mall.
Centum Investment – majority owned by Kenyan billionaire Chris Kirubi – has also invested in necessary infrastructure such as power and water and a unique riverfront experience which includes dancing fountains. The theme park comprises activities including a flume ride, bumper boats, water zorbing, and a water park.
The mall has a parking capacity of 2000 cars and a security system touted to be at military standards. This investment in security was not surprising to media as it was just in 2013 when terrorists struck another big mall in Nairobi – Westgate Mall – killing scores and leaving hundreds more injured and maimed.
Kirubi said that by constructing a mall unseen in the region, Kenya was expressing the story of “Africa rising” by going that extra mile to offer a destination that showed Africa as a place where all things were possible.
The complex would ultimately create jobs for many people, especially the youth, in different sectors. So far, the construction of the mall had benefitted local industries through the purchase of local raw materials such as cement and glass, as well as employing over 3000 workers, including engineers and other professionals, he said.
“We have a healthy mix of international and local stores. We have 50 international brands coming to Kenya for the first time ever.” Retailers in the food and hospitality sectors were also relying on local farmers to supply produce for consumption, he said.
For sustainable power production, the complex will have solar panels installed on the rooftop parking to complement the grid supply. Natural lighting and ventilation have also been leveraged in the design to drive energy efficiency and eliminate the need for artificial lighting and air conditioning.
South Africa’s City Lodge Hotel group is among property owners who have purchased plots on the development and has began construction of a three star hotel. Victoria Bank is also constructing an office block on its own plot.
The media witnessed many of the retail outlets putting final touches to their shops in readiness for the February opening which is set for Valentine’s Day.
Get ready for Dubai’s first National Day Sale
Dubai Shopping Festival sale promotions
Dubai: Are you interested in discounts of up to 90 per cent the next time you go shopping?
Then get ready for Dubai’s first National Day Sale from December 1 to 3.
The retail initiative by the Dubai Festivals and Retail Establishment marks the UAE’s 45th National Day.
The National Day Sale will feature participating malls and retail outlets offering shoppers mega discounts of between 30 per cent to 90 per cent on a range of merchandise.
There’s a good bet that a streaming service like Amazon will take home an Oscar.
The staff of Fortune recently assembled its predictions for 2017. Here’s one of our forecasts.
For as long as anyone can remember the Oscars have been the dominated by iconic Los Angeles studios. But Amazon’s Jeff Bezos has made it clear that he wants one of the gold statues—and 2017 could be the year, if not for Bezos than for another streaming service. Netflix has come the closest, but still fell short after scoring Academy Award nominations in the Best Documentary category each of the past three years.
In 2017, though, Netflix NFLX 1.09% has particularly strong contender in the doc genre with 13th, director Ava Duvernay’s (Selma) exploration of race and the U.S. criminal justice system. Meanwhile, Amazon AMZN 0.04% has a strong Oscar candidate in its devastating drama Manchester by the Sea, which the e-commerce giant bought for a whopping $10 million at the 2016 Sundance Film Festival.
The high street store is shutting 80 outlets around the country due to plunging half-year profits
A list of Marks & Spencer clothing and home stores that could be closed has been released.
The high street store is shutting 30 outlets around UK and converting 45 others to Simply Food stores due to plunging half-year profits.
It will also shut 53 stores across 10 international markets – including 10 in China and seven in France, while pulling out of Belgium, Estonia, Hungary and Lithuania – putting around 2,100 jobs at risk.
The full list of closures has not yet been revealed by M&S but retail analysts say they have identified those stores at risk of shutting.
Local Data Company director Matthew Hopkinson told the Daily Mail: “There are 35 towns and cities that have more than two M&S stores either on the high street, in a shopping centre or on the edge of town in a retail park.
“If one removes the large urban centres such as London, Glasgow and other cities, there are 22 towns where one might question the need for two stores.”
M&S said the list was not based on any official data and dismissed it as ‘speculation’.
A spokesperson for Marks & Spencer said: “We are very disappointed that anyone would choose to speculate in this way.
“This list is not based on any M&S data and we have not published any locations.
“What we have done is outlined plans to improve our store estate over the next five years which include opening 200 new Food stores and selling Clothing and Home from 60 fewer stores.”
M&S is planning to expand its food offering, which is proving more of a success than its clothing
The latest restructure moves come as M&S revealed more sales falls in its embattled clothing division, with like-for-like sales down by 5.9% in the first half.
But it narrowed the sales decline from 8.9% in the first quarter – its worst performance for a decade – to 2.9% in the second quarter.
Same-store food sales fell 0.9% over the half-year, while it saw growth of 0.3% at M&S.com, leaving overall UK like-for-like sales 3% lower.
M&S has reported an 18.6% fall in underlying pretax profit for its first half to October 1, though that is slightly better than expected.
Profits of around £216million were predicted, but the actual figure posted this morning was £231.1 million.
Marks & Spencer flagship store in Paris, on Champs-Elysees, which will be shut (Photo: Google Streetview)
The international closures are part of a new plan to focus its international business on a franchise model. Pulling out of those international markets is expected to eliminate annual losses of £45 million.
In July, M&S announced its clothing arm suffered its worst performance for more than a decade as it cut back on promotions, with sales plummeting 8.9%.
Newcastle Upon Tyne
Mohamed Alabbar and Saudi Arabia’s Public Investment Fund (PIF) are teaming up to launch a Middle Eastern e-commerce platform, the Dubai-based billionaire announced on Sunday.
At the media launch at Dubai Opera, Alabbar described the new e-commerce venture – Noon.com – as “game changing”.
“We’re turning the e-commerce environment in Middle East upside down,” he said, “and then we’re going to turn it upside down again in another six months.”
Alabbar revealed that Noon.com will have 20 million products on the platform on day one when it launches next January. The average shopping mall in Dubai has 1.5 million goods, he said.
The warehouse facility in Dubai is the size of 60 football pitches, he added.
Investors are initially contributing $1 billion to the project, which will be 50 percent owned by the Saudi sovereign wealth fund, Alabbar said. The other 50 percent will be owned by Alabbar and other regional investors.
Noon.com will launch operations in Saudi Arabia and the UAE, with launches planned for other Arab countries at a later date.
CEO says tough conditions to continue.
JOHANNESBURG – South African no-frills retailer Mr Price said on Monday it expected low sales for the rest of the financial year after reporting its first decline in profit in 15 years, sending its shares to a three-year low.
Sluggish economic growth in South Africa, seen at less than 1% this year, coupled with rising interest rates and inflation and a warmer than expected winter have forced clothing retailers to cut prices and clear stock, hurting Mr Price’s sales.
It followed fancier rival Woolworths Holdings, which reported slower sales growth last week and said markdowns by other clothing retailers had affected sales.
Mr Price said consumers are under “considerable pressure” and have diverted spending away from clothing to food and other essentials.
“We expect trading conditions to remain difficult in the second half with no relief in sight for the embattled consumer,” Chief Executive Stuart Bird said.
Mr Price’s shares fell more than 2% after the company reported a 13.7% decline in half-year profit.
Diluted headline earnings per share fell to 351.2 cents for the six months to end-September, versus 406.8 cents in the corresponding period last year.
The retailer, which also sells furniture and homeware to thrifty shoppers, cut its interim dividend by 8 percent to 228.2 cents per share, from 248 cents in the same period last year. The dividend a year ago was up 17.3% from the first half of 2014.
Headline EPS is the main profit measure in South Africa and strips out certain one-off items.
Revenue form the company’s apparel division, which accounts for 60% of its sales, fell 0.5% from a year earlier.
The retail sector is feeling the squeeze as interest rates in South Africa have risen by 200 basis points since early 2014 to contain rising inflation, hurting consumers’ spending power.
“The weakness has pretty much been consistent among all retailers,” said SBG Securities retail analyst Kaeleen Brown.
High food inflation had gnawed at consumers’ disposable income and retailers’ profits were also being hit as rivals cut prices to get rid of their old stock, Brown said.
Shares in Mr Price, which have halved since August, were down 2.4% at R130.48 by 1159 GMT, bucking a slight rise in Johannesburg’s All-share index.
Alibaba Group, the e-commerce giant behind the 24-hour Singles’ Day shopping blitz, has raked up a record USD 17.6 billion in the Singles Day online sales, creating a new record in global retail sales for any single day.
Consumers spent more than 120 billion yuan (USD 17.6 billion) shopping online on leading e-commerce platform Alibaba in their annual buying spree yesterday, sources with Alibaba Group said today.
Online transactions totaled 120.748 billion yuan in the 24 hours that ended as the clocks struck 12 p.m. yesterday, a record amount in global retail for any single day, data provided by Alibaba said.
The shopping spree hit a climactic high just nine minutes after midnight on Friday morning, with an average 120,000 transactions handled per second on Alipay, Alibaba’s mobile payment platform, 1.4 times as many as last year.
In addition, 54,000 payments were made every second through the wireless service for debit cards, according to Ant Financial, which runs Alipay.
Alipay handled a total of 1.05 billion payments yesterday, a surge of 48 per cent year-on-year.
Altogether, 657 million delivery orders were handled by Alibaba’s delivery service platform, in the 24-hour shopping event, up 40.7 per cent from last year.
More than 200 countries and regions were involved in the shopping spree, and 47 million consumers ordered products by international brands, Zhang Yong, Alibaba’s CEO said.
The shopping spree on Singles’ Day, which is named for the repeated digit 1 in the date November 11, was created by Alibaba in 2009.
The annual event has been a test and rehearsal of China’s new retail technology, market operation and business patterns, said Jack Ma, founder and executive chairman of Alibaba Group.
New retail patterns are created when online and offline sales, logistics services, technology and marketing data make a perfect match, said Ma.
“This, in the meantime, upgrades the supply chain and promotes supply-side reform.”
According to Alibaba Group, consumers in Shanghai, Beijing, Shenzhen, Hangzhou and Guangzhou spent more on Singles’ Day than those in other Chinese cities, state-run Xinhua news agency reported.
South African retail stocks slumped, heading for the lowest in almost seven months, after Woolworths Holdings Ltd. said clothing sales fell, adding to similar recent declines reported by local competitors.
The eleven-member FTSE/JSE Africa General Retailers Index retreated 4.1 percent in Johannesburg, heading for the lowest level since April 24. Cape Town-based Woolworths tumbled 3.7 percent to 67.68 rand by 2:55 p.m. in Johannesburg, the lowest for more than two years and extending the decline by the owner of Australia’s David Jones department stores to 33 percent in 2016.
“As inflation rises, we are seeing South African retail coming to a grinding halt,” Alec Abraham, equity analyst at Sasfin Securities, said by phone from Johannesburg. “Even the wealthier consumers are now feeling it.”
Discretionary spending is under pressure from an unemployment level of 27 percent, the slowest economic growth since 2009 and rising interest rates. Inflation has been above 6 percent most of this year. Comparable sales fell at Woolworths’ South African clothing and general merchandise unit, as well as at its Australian Country Road business. Trading has been difficult in both countries, it said in a statement Friday.
Mr Price Group Ltd. led the decline among retailers, falling 7.5 percent. The clothing and household-goods company warned two months ago that first-half earnings would probably decline as it experienced the weakest winter season in more than a decade. Mr Price’s stock has slumped 39 percent since that announcement. It’s expected to report earnings on Nov. 14.
The drop in the general retail index was followed by a decline in the FTSE/JSE Africa Food & Drug Retailers Index, which fell as much as 2.2 percent, led by Pick n Pay Stores Ltd.’s 5.8 percent drop.
They are already two of the world’s best known and most successful businessmen. But it appears Amazon founder Jeff Bezos and Emaar chairman Mohamed Alabbar may soon have a lot more in common.
Sources have confirmed to Arabian Business that the two business legends were seen on Friday in Dubai Mall. Their meeting comes just 48 hours before Alabbar takes to the stage at the Dubai Opera On Sunday – where the Emaar chairman is widely expected to finally unveil details of a much anticipated e-commerce venture. His media invitation teasingly refers to a “game changing online shopping platform.”
Arabian Business first exclusively revealed in July this year Alabbar’s plans to create the “Alibaba of the Middle East” – his own gigantic e-commerce business. During a “Ramadan lecture” to an audience including the Crown Prince of Abu Dhabi, Alabbar is understood to have suggested that by the end of 2016, the UAE will have seen the launch of an e-commerce company, a social media service, a modern online banking system and an online logistics company.
He also confirmed that $1bn had already been raised – and in July this year Alabbar led two investor groups in buying a combined 16.45 percent stake in Dubai-based courier Aramex. He also took a 4 percent stake in Yoox Net-a-Porter worth €100m ($110.1m)
With Alabbar on the verge of launching his mega e-commerce venture, the meeting with Bezos clearly has some significance. Amazon doesn’t have operations on the Middle East but their products are available here – and Bezos will indeed be keen to look for a partner with scale to enter this market.
However, Bezos – like Alabbar – doesn’t do small. In the e-commerce game, scale matters.
Both have a lot in common. They’re visionaries, who dare to take calculated risks, and both men may ultimately aim to create a winning proposition – in terms of speed and ease of transactions, available goods and delivery times.
The invitation for Sunday’s event quite boldly proclaims the launch as a “Quantum leap in e-commerce”.
With Bezos and Alabbar involved, that could be such a wonderful thing to happen to consumers in this part of the world.
Marks & Spencer (M&S)’s department stores in the Gulf will be unaffected by the British retail giant’s decision to close down more than 80 shops in the UK and around the world.
The company announced on Tuesday that it would shut 30 outlets in the UK, and 53 overseas, including most of its fully owned stores. Altogether, it will shutter operations in 10 international markets, including France and China, at a cost of up to 200 million pounds over the next year.
In the Gulf, M&S outlets are operated by Dubai’s Al Futtaim, and the retailer said that that relationship would continue.
“We are fully committed to our franchise partnership with Al Futtaim and our franchise stores in the Gulf operated by Al-Futtaim are unaffected by today’s proposals,” an M&S UK spokesperson told Arabian Business in response to emailed questions. “Going forward we propose to operate with fewer wholly-owned markets and have a greater focus on our established joint ventures and franchise partnerships.
“Customers can continue to shop with us at our stores in the region.”
Al Futtaim has held the regional franchise rights for M&S since 1998, and the franchise partnership boasts 26 stores located in Bahrain, Egypt, Kuwait, Lebanon, Oman, Qatar and the UAE, according to the company’s website.
M&S, whose shares have fallen 22 percent so far this year, reported an 18.6 percent slump in first-half profit and another fall in quarterly clothing sales.
Steve Rowe, a 26-year company veteran, took over as CEO in April and has the tough task of reviving a 132-year-old British institution that has fallen out of fashion over the last decade.
“These are tough decisions, but vital to building a future M&S that is simpler, more relevant, multi-channel and focused on delivering sustainable returns,” he said.
So far, Rowe’s priority has been trying to turn around M&S’s underperforming clothing and homewares business.
But on Tuesday he outlined how the firm will streamline its British store estate of over 900 stores over five years and detailed a rationalisation of its international operations.
In a statement, the company said it will transform its UK estate over the next five years while continuing to increase the number of Simply Food stores.
Steve Rowe, Marks & Spencer chief executive, said: “In May, we laid out a number of questions which we would answer as part of our strategic review. We committed to creating a simpler business with customers at its heart, and taking action to start to recover our Clothing & Home business and continue to grow in Food.
“Our aim is to build a sustainable business which will delight our customers, provide a robust foundation for future growth and deliver value for our shareholders in the long term. We have made good progress on our plans and customers are already noticing a difference, particularly in Clothing & Home.”
Looking overseas, Marks & Spencer is proposing to close 53 stores as it exits 10 loss-making owned markets in China, France, Belgium, Estonia, Hungary, Lithuania, the Netherlands, Poland, Romania and Slovakia.
While total revenue was flat in the six months to 1 October, food sales grew by 4% on a total basis but declined by 0.9% on a like-for-like basis. Total clothing and homeware sales fell by 5.3% while like-for-like sales declined by 5.9%.
In the UK total sales rose by 0.1% but fell 3% on a like-for-like basis. International sales dropped by 1%.
Marks & Spencer said product was key to recovering and growing its clothing and home sales. It now has 10% fewer clothing lines and has introduced a more contemporary colour palette for the autumn
It has also changed the layout of its stores with more of clothes grouped together in product categories, rather than in brand co-ordinated departments. In addition, the company has hired 3,300 new customer assistants in areas such as fitting rooms and till points.
Marks & Spencer said the performance of new Simply Food stores was ahead of expectations with stores opened in the past year exceeding sales forecasts by 17%. It is planning to open over 200 new Simply Food stores by the end of 2019.
Commenting on the review of the store estate, Rowe said: “These are tough decisions, but vital to building a future Marks & Spencer that is simpler, more relevant, multi-channel and focused on delivering sustainable returns.”
The shop at 16 Earlham Street specialises in premium loafers for men. Designed by both an in-house team and Dreambox, the store features a lounge area and coffee bar as well as a dedicated space where customers can create their own unique and embossed shoes.
Duke & Dexter founder Archie Hewlett said: “Our heritage is the basis for the success of our brand and Seven Dials as a location mirrored our ethos perfectly. We are amongst great international brands and are thrilled to be making our debut here on Earlham Street in the heart of London’s West End.”
With the shoes designed in London and handcrafted in Sheffield, Duke & Dexter was founded in 2014 and its shoes are stocked by retailers such as Harvey Nichols, Selfridges and Liberty and also in over 100 countries worldwide. The shoes have a celebrity following including the likes of Justin Timberlake, Ryan Reynolds, Eddie Redmayne, Poppy Delevingne, Tinie Tempah and Tyson Beckford.
Sam Bain-Mollison, head of group retail strategy and leasing at Shaftesbury, added: “Earlham Street features a number of flagship stores for emerging menswear fashion brands alongside other international retailers. Duke & Dexter is a really exciting brand and we are so pleased to be able to launch their first UK store in Seven Dials, building on our truly unique retail offer in London.”
Duke & Dexter join recent international debuts on Earlham Street from male beauty retailer BEAST and men’s sportswear brand Ron Dorff.
Back in September 2015, Memeburn reported that ecommerce platform Groupon began shedding global offices in an effort to “make the business more efficient”. And while South Africa wasn’t a country affected back then, it is now.
Groupon South Africa is dead: here’s what will happen to your orders
Groupon South Africa today announced that it will shutter its operations in the country, in a bid to further streamline its global business operations.
Groupon launched in South Africa in 2010 after it bought local startup Twangoo.
Groupon South Africa will effectively shutter on 30 November
“We are sorry to inform you that as of 4 November 2016, Groupon has wound down its operations in South Africa and we are unable to offer you any deals today,” the company states on its website.
“For our customers, this means we will stop offering deals on our website from tonight. All current vouchers bought will remain valid until the date stated on the voucher. The terms and conditions on the voucher remain the same.”
South Africa is one of 12 countries getting the axe, as Groupon begins to focus on 15 nations earmarked as its “go-forward country footprint”.
Following a day of difficult headlines for the retailer, Marks & Spencer is expected to close down dozens of UK stores.
Sky News has reported that chief executive Steve Rowe may announce the closure of many UK stores, in an effort to turn around its financial troubles. It was also reported this morning that many of its Chinese stores could also close.
The source also said that many stores which don’t close will see space reallocated to focus on its grocery section, moving away from its fashion arm.
M&S is set to reveal its interim results next week, in which it is expected to report lower profits and sales. The retailer has denied that the recent changes to pay had anything to do with financial troubles, but did announce plans to cull 500 jobs in its London head office.
These claims have not yet been confirmed, and a spokesperson for M&S has stated they do not comment on rumours.
In July, a month after his appointment, Rowe announced the largest fall in clothing sales for over 10 years, stating: “These are not the numbers I wanted to see – not by any stretch.”
Shares in the retailer have also been driven down by roughly a third in the last year.
Springs Mall, a R950m joint venture investment by Blue Crane Eco Mall, Flanagan & Gerard Property Development & Investment, REIT Vukile Property Fund and Murinda Investments, will open on 16 March 2017.
When the 48,000 sqm mall opens next year, it will become the only major mall in Springs, Ekurhuleni, in the east of Gauteng.
“For many years, the vision of the Springs-based D’Arrigo family to develop a major mall for Springs seemed an impossibility. In less than six months, it will become a reality,” says Paul Gerard of Flanagan & Gerard Property Development & Investment. “What’s more, it has become a shared vision with retailers and the community also invested in the mall, and we are all very excited for its public launch.”
In anticipation of its opening, the mall is already almost full, with some 96% of retail space let. Anchor tenants at Springs Mall include leading national retailers Woolworths, Checkers, Pick n Pay and Edgars. These retailing giants are supported by a comprehensive line-up of retail brands, concepts and leisure options – both big names and one-off treasures – with plenty to please everyone.
Destined to become a dominant mall in the region, the new Springs Mall benefits from excellent access off the N17 highway and Wit and Jan Smuts Roads. In addition, as part of the mall’s development, its owners have also invested in major improvements to the roads around the mall, which will benefit all road users.
Gerard reports that, in addition to this new infrastructure, with the opening of Springs Mall, people will not only have a top-notch new venue in which to fulfil their shopping needs, but also a vibrant place to meet, unwind and be entertained.
The fashion retailer cites an increasingly tough retail market.
Investors gave the shares of Truworths International a dressing down on Thursday as they fretted about the fashion retailer’s bearish sales update showing that it’s feeling the pinch from South Africa’s tough retail landscape.
Truworths’ share price dived by 7.8% during morning trade after it said that sales for its first 18 weeks to October 30 declined by 1% to R4.4 billion compared with growth of 16% last year.
These estimates exclude its UK fashion footwear chain Office Retail Group, which Truworths acquired in 2015 for £256 million – marking its foray into the region.
The pressure point for the retail is on its like-for-like sales which decreased by 5%.
Fashion retailers have been on the back foot as there are few signs that there will be a revival spending by hard-pressed consumers. The sustained rise in inflation, interest rates and living costs, is leaving little room for non-essential and discretionary-like purchases (including apparel), prompting consumers to prioritise the spend on food.
Factoring in sales from the Office business, Truworths’ group sales grew by 39% to R6.2 billion – indicative of its UK business being a boon for the retailer.
Office recorded retail sales for the period under review of £97.3 million (R1.8 billion in rand terms), up 1.4% relative to the prior period’s £95.9 million.
Truworths, traditionally a credit-based retailer, saw its credit sales decrease by 1% and cash sales grew by 130%. Credit sales comprised 49% of Truworths’ retail sales and 70% excluding its Office business.
Truworths’ credit sales have been under pressure since it began to implement the National Credit Regulator’s (NCR) new affordability assessments in 2015 – intended to manage the risk of issuing credit to ensure that consumers are not over-indebted through unaffordable credit agreements.
The NCR deems the regulations as necessary to ensure that reckless lending is avoided while Truworths, Mr Price and The Foschini Group (TFG) have deemed them onerous.
One of the ways of appealing to a broad range of consumers with different affordability profiles is to contain selling price inflation. Truworths’ product inflation averaged 16%. Other fashion retailers such as Woolworths, Mr Price and TFG have kept their inflation below 10% to grow their market share and get shoppers into their stores.
Truworths – with brands such as LTD, Daniel Hechter, The Young Designers Emporium, Inwear, Identity and others – has been widely criticised for its narrow pricing methods and having limited options for consumers wanting cheaper apparel. This while its competitors such as Mr Price, Woolworths, TFG – and international retailers Cotton On, Zara and recently H&M – have been aggressive in their wide price offerings and discounting their merchandise during the recent winter season.
Truworths’ results for the 26-weeks to December 2016 will be released in February 2017.
The brand has relocated to a 9,000 square foot flagship on Liverpool ONE’s South John Street. The new store is double the size of Apple’s previous unit on Paradise Street which will become home to the Guess fashion brand later this month.
Apple is the most recent in a series of upsizes and new additions to Liverpool ONE’s line-up of brands. These include Jack Wolfskin, Rolex and Victoria’s Secret. Meanwhile, Urban Decay, Lindt and Smiggle are currently fitting out their stores in time for Christmas.
Miles Dunnett, director at Grosvenor Europe, said: “Apple’s upsize is yet another great milestone for Liverpool ONE. Their continued exceptional performance has driven their desire to not only create a larger store, but to deliver a unique retailing experience for visitors.
“Apple joins the ever growing list of additions to Liverpool ONE, and by the end of the year, over 20 new stores will have opened, creating one of the most vibrant, exciting line-ups in the UK.”
Lidl’s new warehouse is nearly 420,000 sq ft
The warehouse, in Southampton, is the discounter’s largest in Britain, measuring almost 420,000 sq ft – the equivalent of 10 football pitches.
Lidl said the facility, which forms part of the retailer’s £1.5bn investment in the UK between 2015 and 2018, will create up to 400 jobs.
It will service Lidl stores in Hampshire, Dorset and West Sussex.
The grocer is in the process of building two further warehouses in Wednesbury and Exeter and is also relocating fulfilment centres in Weston-Super-Mare and Livingston to Bristol and Eurocentral respectively.
Lidl UK regional director Marco Ivone said: “The opening of our new Southampton RDC marks an incredibly exciting time for the business, particularly in the South.
“Not only is it necessary to accommodate the scale of our existing and future operations in the area, but we have been able to create significant job opportunities as a result of the new warehouse and will continue to invest in the South as we move forward with our expansion plans.”
South African malls
In the world of South African retail property development, new construction has slowed down and there’s the perception of oversupply, but some of Gauteng’s biggest malls are getting bigger, SA Commercial Property News reported.
There’s appetite for regional and super-regional malls, which enjoyed low vacancy rates in 2016 — 3 percent and 2 percent respectively — painting a positive picture of the economy.
Johannesburg’s office market is a different story with slow growth in rental rates. Vacancies increased from 11.3 percent in the third quarter of 2015 to 11.8 percent in Q3 2016.
The industrial property market is dominated by transport and logistics service providers.
“South African commercial property continues to present attractive investment opportunities to discerning investors, despite challenging economic conditions,” said said Robert Shaff of Nexus Property Group, in a Biz Community interview. “Evidence of this lies in the strong performance of the South African listed property industry, having risen nearly 9 percent over the first nine months of this year – close to double what equities have achieved.”
Jeffrey Wapnick is managing director of Octodec, a real estate investment trust (REIT) that claims to be one of the largest owners of property in the Tshwane and Johannesburg central business disctricts.
“There is a positive momentum in the CBDs with demand for quality residential and retail space expected to remain solid even in challenging economic conditions,” Wapnick said, according to SACommercialPropNews. “South Africa is facing economic challenges but we are seeing significant private and public investment projects accelerating in the Tshwane and Johannesburg CBDs. This is highlighted by the increasing demand from national retailers recognising our CBD nodes as prime locations for stores roll-out.”
For the year ending in September 2016, South African REITs provided a solid performance for investors, EProp reported. They delivered total returns of 12.3 percent compared with South African shares at 4.8 percent, South African bonds at 15 percent and cash at 5.4 percent.
Discounter Aldi is set to open its first store in Italy by next summer. According to Italian daily Il Sole 24 Ore, the 1,500 square metre store will be located in Tento, to be followed by stores in Verona and Bolzano. Aldi will be faced with strong competition in Italy, mainly from Eurospin (32% market share in the discount market), Lidl (18%) and Md.
Hypermarket chain Carrefour plans to open ten new stores in the UAE in 2017, according to a statement on Sunday from Majid Al Futtaim, which holds the Carrefour franchise in the Middle East, Africa and Central Asia. Carrefour has set a target to reach 140 hypermarkets and 210 supermarkets in the countries in which Majid Al Futtaim operates by 2018.
Shoprite Founder Basson to Step Down After 37 Years at HelmPosted by Janice Kew
Company veteran Engelbrecht to take over as CEO from Jan. 1
New leader must overcome weak domestic consumer confidence
Shoprite Holdings Ltd. said founder Whitey Basson will retire as chief executive officer, ending a 37-year tenure that saw the South African company grow to become the continent’s biggest food retailer.
Basson, who turns 71 in January, will step down at the end of December and be succeeded by Pieter Engelbrecht, the company’s 47-year-old chief operations officer, Cape Town-based Shoprite said in a statement on Monday. Engelbrecht, who has been with the company for more than two decades, will take over as CEO from Jan. 1.
Whitey Basson Photographer: Robert Tshabalala/Financial Mail/Gallo Images/Getty Images
“I am tired — the business is now so large and there are so many issues that take up too much time,” Basson told reporters at the company’s annual shareholder meeting in Cape Town. “Pieter is a very driven guy. I’d say about 50 percent of the operating issues he’s already taken over. So it’s not a new job for him.”
Basson has led Shoprite since forming the company in 1979. He expanded the retailer from an eight-store chain to Africa’s industry leader with a market value of 115 billion rand ($8.4 billion) and more than 140,000 workers. To build on that, Engelbrecht will need to overcome weak domestic consumer confidence and is likely to take the company beyond Africa.
“Whitey has turned 70, so I think it was imminent,” Evan Walker, a money manager at 36One Asset Management, said by phone from Johannesburg. The incoming CEO “has been very instrumental in a lot of aspects of growth in that business, so I think he is a very highly regarded successor.”
Shoprite shares rose 4.2 percent to a two-month high in Johannesburg after the company also said sales gained 16 percent in the three months through September. Revenue at the South African stores increased 12 percent as promotions helped offset the impact on customers of high unemployment and inflation.
Pieter Engelbrecht Source: Shoprite Holdings Ltd.
Basson began his career by working as an accountant in the early 1970s, then entered the retail industry as a financial manager of the Pep Stores chain. He formed Shoprite by acquiring a small Western Cape grocery business and began building the company through store openings and acquisitions.
Inspired by low-cost European discounters such as Aldi, Basson focused on the middle-to-lower income market, the biggest in South Africa, while acquiring and reviving larger, unprofitable supermarket chains such as Checkers and OK Bazaars. Shoprite opened its first store outside its home market in Zambia in 1995.
Basson said recently that the company will consider expanding outside Africa, following in the footsteps of fellow South African retailer Steinhoff International Holdings NV, which has transferred its primary listing to Frankfurt and made bids for companies in France, the U.K. and the U.S. Shoprite has stores in 15 African countries. He will remain as a non-executive vice chairman to ensure an orderly leadership transition, the company said.
“The company has become very large and is at a crossroads,” Chairman Christo Wiese, who is also South Africa’s richest man and Shoprite’s largest shareholder, told investors at the annual meeting. “Over the next few years it will have to globalize. We will continue to keep an eye on opportunities.”
The succession comes only a month after Shoprite said it doubled the CEO’s pay to 100.1 million rand in its last fiscal year, thanks to a 50 million rand bonus for beating a profit-growth target. Almost 30 percent of votes at the AGM were cast against the remuneration policy, in line with the previous year, when the Public Investment Corp. was among those who didn’t support the CEO’s pay deal. The state-owned PIC is Shoprite’s biggest investor with an 9.8 percent stake, according to data compiled by Bloomberg.
Cape Union Mart Group says it has acquired Keedo, a South African designer and manufacturer of quality children’s clothing.
Keedo adds 25 stores and a factory to Cape Union Mart Group’s retail footprint of nearly 220 stores and their K-Way factory. The group now provides employment to approximately 3,000 people.
While Keedo will be wholly owned by Cape Union Mart Group, the fourth generation family business privately owned by the Krawitz family, the chain will continue to operate independently under the stewardship of Nelia Annandale.
The Cape Union Mart Group currently comprises four national retail chains. Cape Union Mart, is South Africa’s leading retailer of outdoor equipment and apparel. Poetry, focusses on clothing, homeware and eclectic gifts for the modern woman. Old Khaki is aimed at casual wear for trendy young men and women.
Tread & Miller is the Group’s youngest chain, focussing on urban footwear. The first Tread & Miller store opened a year ago and has already grown into a 20 strong chain.