S&V Weekly Newsletter Vol.11 No.23, June 9 2025

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Personnel changes

Durban, KZN, SA – Mohamed Dewan was appointed General Manager of Boardriders South Africa, a subsidiary of the LA Group, in April.
     Before joining Boardriders, Dewan was appointed as COO, Merchandise and Marketing at Tekkie Town, a division of Pepkor, where he was a member of the Executive Committee. His role focused on strengthening the brand’s product and commercial strategy. He spent nearly five years with the company. Under his leadership, the business was refocused into Sportswear and established new categories in new markets.
     Prior to that, Dewan held an executive position at the Studio 88 Group for close to a decade, contributing to the group’s merchandise strategy and expansion efforts, including brand repositioning and acquisition projects. He exited the business in 2018.
     Earlier in his retail career, he spent several years in senior management at Edgars and was involved in Edcon’s official events store rollout during the 2010 FIFA World Cup.
     Commenting on his current role, Dewan said: “Boardriders appealed to me because of the global momentum behind the brands we represent. RVCA, in particular, is an exciting brand with strong potential in the market. With ABG’s renewed focus and the LA Group’s distribution experience, we see a great opportunity to reignite surf and skate culture in the region.”
     Dewan succeeds former GM Jethro Jewell, who resigned earlier this year. Jewell said he wished Dewan “every success” and remains “passionate about the brand.”
     In an earlier version of this report, it was incorrectly stated that Jewell was dismissed. In fact, he resigned. S&V apologises for the error.

Cape Town, W. Cape, SA – Kennith Barlow, formerly group merchandise executive at FrontierCo, has resigned. He wrote that he would “take some time off and re-assess what the future looks like”.
     FrontierCo CEO Bernard Mostert said he had not been replaced, and that “we wish Kennith well on his next chapter”.

Wages: Still no finality

In the General Goods & Handbags Sector, S&V understands that the Association of SA Manufacturers of Luggage, Handbags & General Goods (ASAM) has reached agreement with the National Union of Leather & Allied Workers (NULAW), and that it is awaiting confirmation from the Southern African Clothing & Textile Workers Union (SACTWU).
     However, it is understood that the Footwear Sector, where the Southern African Footwear & Leather Industries Association (SAFLIA) is in negotiations with NULAW and SACTWU, has not reached agreement.

Annual report
Mr Price Group Limited: Annual results for the 52 weeks ended 29 March 2025

Apparel 80% of business, sales +7.8% (organic sales +3.4%), store count tops 3 000 in 15 chains, market share up

Extracts from the full report which can be seen here: SENS_20250606_S505884.pdf

Mr Price Group demonstrated the continued resilience of its fashion-value business model throughout its 2025 financial year. Total revenue increased by 7.9% to R40.9bn and the group gained 50bps of market share (RLC). The gross margin expanded 80bps to 40.5% and the group achieved a record operating profit level of R5.8bn, with its operating margin increasing 20bps to 14.2%.
The group recorded a strong second half performance as it gained further profitable market share, in line with its targeted strategic outcome, and increased diluted headline earnings per share by 12.1%. This was despite the weaker month of February for the retail sector and the shift of school holidays and Easter from March to April. This performance was due to improved sales momentum and lower markdowns following a more muted retail environment in the first half.
Group CEO, Mark Blair, said: “The first half of the financial year was challenging for the retail sector but improved in the second half. We are very satisfied to have gained similar levels of market share in both periods, reflecting the value we were able to provide our customers despite very different economic conditions. The growth in sales momentum through the second half was supported by strong comparable store sales growth and GP margin gains across all trading segments.”

Highlights for the period:
- Revenue exceeded R40bn for the first time
- Retail sales up 7.8% (H2: 9.9%) and market share increased 50bps (RLC)
- Group GP margin increased 80bps
- Opened 184 new stores, supporting weighted average space growth of 4.3%
- Record operating profit of R5.8bn, an increase of 8.9% (H2: up 11.7%)
- Cash generated by operations of R8.7bn contributed to a cash balance of R4.1bn
- Group sourced 127.8m units from South Africa, equating to R5.2bn in orders
- Diluted headline earnings per share up 10.1% (H2: up 12.1%)

Group retail sales of R39.4bn increased 7.8% and comparable store sales increased 3.4% (H2: retail sales and comparable store sales accelerated to 9.9% and 5.7% respectively). Other revenue increased 6.6% to R1.3bn.
Group store sales increased 7.8% and online sales 7.9%, reflecting the effectiveness of the group’s omni-channel strategy in meeting its customers shopping preferences. Momentum improved in H2 across both sales channels, with sales growing 9.5% and 11.5% respectively. Group unit sales increased 3.6% (H2: 4.9%) and retail selling price (RSP) inflation of 3.7% enabled its leading value positioning.
The group surpassed 3 000 stores during the Period, as it opened 184 new stores across its 15 trading chains, expanding its total store footprint to 3 030 stores. Weighted average trading space increased 4.3%. New store returns continue to be closely managed and far exceeded the group’s ROOA thresholds, which are well in excess of its WACC.
The group’s customers continued to prefer to transact with cash, as its cash sales constituted 89.3% of group retail sales and increased 7.9%. Interest rate cuts in H2 supported an improving credit environment, reflected in the group’s approval rate increasing to 20.3% and peaking at 23.8% in March 2025. Credit approvals will continue to be cautiously managed, while the group’s lay-by offering gained further support.
The group’s gross profit margin expanded 80bps to 40.5%. This performance was due to strong merchandise execution and lower markdowns across trading segments as its merchandise GP margin increased to 41.3% and its Telecoms GP margin expanded to 20.0%. Additionally, further gains were made in each of its acquired businesses as the upward margin trajectory continued due to improving sourcing practices and operational efficiencies.
Profit from operating activities increased 8.9% to R5.8bn, with strong growth of 11.7% in H2. Total expenses increased 10.0%, which included net weighted average space growth of 4.3%. The group’s expenses to retail sales and other revenue ratio of 27.9% was within its targeted range. All other expenses were carefully managed, resulting in the operating margin expanding 20bps to 14.2%, in the mid-point of the group’s medium-term targeted range. Operating margin in H2 expanded 30bps to 16.3% and is typically seasonally higher than H1.

The Apparel segment increased retail sales by 7.9% to R31.4bn and comparable retail sales increased 3.5%. In H2, retail sales grew 9.8% against a base of 9.9% and comparable sales growth accelerated to 5.8%. The segment gained 50bps of market share, marking two consecutive years of gains. Mr Price Apparel gained over R700m in market share from competitors in the last year and reported strong GP margin gains. Power Fashion remains the fastest growing division in the segment, continuing its long run of market share gains while Studio 88 performed strongly against a firm base. Mr Price Sport and Miladys both delivered improved performances in H2, adding to the segments strong momentum going into the new financial year.
The Homeware segment continued its recovery, reporting retail sales growth of 6.4% (comparable store sales up 3.1%) to R6.7bn. Retail sales in H2 accelerated as the segment recorded growth of 7.7% and comparable store sales growth of 5.8%. Each division in the segment reflected this accelerating sales growth trend and importantly delivered significant gross and operating margin improvements. Mr Price Home continues to report the highest brand equity across all homeware retailers and remains the most loved homeware brand according to NiQ. Sheet Street recorded the highest sales growth recovery between H1 and H2, while Yuppiechef achieved double-digit growth and GP margins gains as it continues its omni-channel expansion.
The Telecoms segment reported another year of market share gains, up 40bps (GfK), as the combined retail sales of Mr Price Cellular and Powercell increased by 13.2% to R1.3bn. The segment, which primarily sells handsets and accessories through 562 store-in-store concepts and 61 stand-alone stores, continues to grow in profitability. The launch of the group’s private label device, Salt, as well as a high accessories attachment rate of 69%, supported gains in both gross and operating margin. The segment continues to be a strategic channel to increase customer engagement as it leverages the Mr Price brand halo.
The Financial Services segment revenue increased 5.7% to R918m. Debtors’ interest and fees increased 6.1% despite a reduction in the repo rate of 75bps during the Period. Improvement in the credit cycle in H2 provided an opportunity for the group’s credit granting scorecard to be re-assessed and increase its account approval rate. It frequently monitors the scorecard against consumer affordability metrics and will continue its prudent approach. Provisions for net bad debt are sufficient and the net bad debt to book ratio remains low.
Gross inventory was up 10.6% and stock freshness (0 - 3 months ageing) remained at the high level of 85.1%, an increase on the prior period.
The majority of the group’s capital expenditure of R830m was apportioned towards new stores, expansions and revamps. The remaining capex was primarily allocated to key strategic enablement projects within the technology and supply chain functions. The group’s cash conversion ratio of 94.9% increased significantly and was far ahead of the medium-term target. This high level of cash generation contributed to the cash balance rising to R4.1bn while the group remains debt free.

Outlook The global economy has been characterised by uncertainty in 2025. Significant shifts in trade partnerships and the potential of US enforced tariffs have threatened growth prospects across markets. The South African economy has not been spared from this impact and its forecast GDP growth has been revised downwards from the previously bullish outlook at the end of 2024.
Prior to this, South Africa’s GDP growth over the previous decade of 0.7% has not been conducive to fostering a healthy business environment. A highly competitive and low growth economy requires the government reform agenda to be accelerated in order to create higher levels of employment and stimulate economic activity.
The consumer environment in South Africa remains volatile. In the short-term, consumer relief was supported by low inflation, lowering petrol prices and interest rate cuts of 100bps which collectively increased disposable income. Real wage growth has experienced some level of recovery, however the sustainability of an improving consumer environment in South Africa in the medium-term could be challenging due to the uncertainty transcending from the global and domestic economies.
Notwithstanding the volatile environment, the group remains committed to delivering differentiated fashion-value merchandise, which continues to be recognised and supported by its loyal and growing customer base. Mr Price Apparel remains the most shopped retailer in South Africa according to MAPS, recognition that supports its commitment to being the customers’ value champion.
Group retail sales in Q1 FY2026 to 31 May increased 11.6%, with all trading divisions gaining market share in April 2025 (latest available RLC data).
The group is confident that its business model, value positioning and brand power will enable it to outperform the market through varying economic cycles, displayed by its consistent market share gains over the past two years. Focus remains on extracting maximum value through profitable market share from its 15 trading chains and investment into strategic enablement projects, predominantly in the technology and supply chain functions. Forecast capital expenditure for FY2026 is anticipated to be R1.6bn, with approximately 200 new stores and increased investment into store revamps, supply chain and technology.
“We have a strong but disciplined growth mindset. Our team has evaluated many opportunities and declined most. Our three acquisitions in recent years have delivered a combined operating profit of R1.2bn in FY2025 and continue to be earnings accretive. Our focused research is ongoing to identify the next growth vehicle that will support the achievement of our long-term vision,” said Blair.
He added, “While there is a great deal of uncertainty around us, our team is extremely focused on delivering consistently strong earnings performances. Our strategy is clear, and we remain sharply focused on executing our proven business model. I extend my thanks to our more than 32 000 associates for their ongoing commitment, to our customers for their patronage and to our suppliers and landlords for their support and partnership for their efforts in achieving this result.”

They Said It

"Sorry to hear about divorce. Not easy on anyone. Don't let lawyers make it messier than it needs to be. Good advice is to get everyone around same table once issues clearly defined and reach a sensible settlement. Lawyers don't generally like the idea because they mostly prefer stoking the flames. Especially when there's money to be made. Sorry to be cynical about my own profession." - Advice from my favourite advocate. It would work for any legal conflict, I guess.

Got anything you'd like to share?

Do you have any suggestions, comments or experiences about the industry that you'd like to share with the industry? - tony@svmag.co.za

New subscribers last week

Deborah, Renew Radianz, South Africa
Johan Business owner, Smart Zinq, South Africa
Director Midpak Trading, Port Elizabeth, South Africa

Birthdays this week

09/06/1957: Willem Fourie, Images, Bloemfontein, Free State, SA.
09/06/1989: Noushard Mahomed Hoosen, Paris Belts, Johannesburg, Gauteng, SA.
10/06/1951: Marthus Louw, retired, formerly Bolton Footwear, Great Brak River, W. Cape, SA.
10/06/1955: Piet Kleyn, CEO, SA Ostrich Business Chamber, Oudtshoorn, W. Cape, SA.
10/06/1960: Lawrence Mabhiza, Truworths Group of Companies, Harare, Zimbabwe.
10/06/1961: Richard Turner, emigrated, formerly Bolton Footwear, Great Brak River, W. Cape, SA.
10/06/1983: Jarod Grossberg, formerly Geestep [closed], Durban, KZN, SA.
11/06/1948: Basie Vermaak, retired, formerly Watson Shoes, Great Brak River, W. Cape, SA.
11/06/1961: Andy Raouna, left the industry, formerly Multiserv, Johannesburg.
12/06/1954: Frieda Maisey, emigrated, formerly Brondean Agencies, Port Elizabeth, E. Cape, SA.
13/06/1943: Peter Book, retired, formerly Woodheads, Cape Town, W. Cape, SA.
13/06/1950: Maria Caldeira, Solemates, East Rand, Gauteng, SA.
13/06/1966: Benedict Plaatjies, Leather from Hart, Pietermaritzburg, KZN, SA.
13/06/1974: Stuart Worrall, Elan-Polo, Cape Town, W. Cape, SA.
14/06/1952: Terry Holton, retired, formerly ACA Threads, Johannesburg, Gauteng, SA.
14/06/1963: Niekie Vermaak, Cape Karoo International, Oudtshoorn, W. Cape, SA.
14/06/1965: Beverley Riley, Brits Leather Products, Brits, NW Province, SA.
14/06/1965: Allan Kisten, Spunlok, Pinetown, KZN, SA.
14/06/1969: Alison Piccione, KMP Footwear, Pinetown, KZN, SA.
14/06/1983: Lebogang Mokwele, QS Safety, Kempton Park, Gauteng, SA.
15/06/1945: James Cragg, agent, East London, E. Cape, SA.
15/06/1947: Stuart Cox, agent, Bloemfontein, Free State, SA.
   

In memoriam this week

09/06/2002: Howard ‘Snowy’ Vaubell, Crown Footwear, Pinetown, KZN, SA.
09/06/2003: Dr Stanley Shuttleworth (b. 1911), LIRI [closed] founder, Grahamstown, E. Cape, SA.
12/06/2004: Neville Williams (b. 04/1945), Cameo Components/Central Components [closed], Pinetown, KZN, SA.

Have you let us know about your birthday, or the birthdays of your colleagues? Our readers love this section, so please become part of it. This also applies to the In Memoriam section. Help us remember former colleagues.

Directory entries updated last week

Astor South Africa (Pty) Ltd [Subsidiary of Astor-Berning GmbH & Co KG], Johannesburg, Gauteng, SA.
Astor South Africa (Pty) Ltd [Subsidiary of Astor-Berning GmbH & Co KG] KZN branch, Durban, KZN, SA.
Astor South Africa (Pty) Ltd [Subsidiary of Astor-Berning GmbH & Co KG] W. Cape branch, Cape Town, W. Cape, SA.
BASF SA (Pty) Ltd – Performance Materials Division, Midrand, Gauteng, SA.
Braitex-Tensilon (Pty) Ltd, Cape Town, W. Cape, SA.
Braitex-Tensilon (Pty) Ltd – Gauteng & KZN sales, Durban, KZN, SA.
Kaytex Belts (Pty) Ltd, Centurion, Gauteng, SA.
Texstyles Import & Export cc, Krugersdorp, Gauteng, SA.

3. Malawian Kwacha (MWK) (buying)

Source: https://www.rbm.mw/

4. Zambian Kwacha (ZMW) (buying)

Source: https://www.boz.zm/

5. Zimbabwe Gold (ZiG)

Source: Source: https://www.rbz.co.zw/

Note: For previous rates, see HERE

ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (06 June 2025) – The current average hide price increased by 0.43% to R2.4712/kg from R2.4712/kg a week ago. The current price is 17.75% lower than the average price a month ago and was 23.0% lower than the average price a year ago. The range of prices reported was as follows: Minimum price: R2.00 Maximum price: R2.92. Please note: Our methodology weighs the prices we collect according to the number of hides they sell in a month. This is done to make it more representative of the prevailing market price. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. - Marlene Louw, senior agricultural economist, Nkhensani Mashimbyi, agricultural economist, and Zama Sangweni, agricultural economist, ABSA group.

Note: For previous prices, see HERE

Have a look at these links

We invite businesses to send us links to websites, Facebook pages and the like which they feel would be of interest to others. The links below are from our database:

Hashtagleather, Durbanville. W. Cape, SA. Leather goods manufacturer.
HCM Designs cc, Durban, KZN, SA. Furniture manufacturer.

THIS WEEK LAST YEAR!

Hi-Tec acquires Trappers Outdoor

Industry veteran heads Dangee Carken move into industrial footwear

Hawks nab 7 officials for massive SARS border post fraud

TFG final results March 2024: ‘Confident we can grow, despite challenges’

In case you missed it!: The May issue of S&V Footwear & Leather Goods Magazine

READ IT HERE - S&V Weekly Newsletter Vol.10 No.24, June 10 2024

THIS WEEK FIVE YEARS AGO!!

Restarting retail
- Makan's Shoe Centre: Frankly, it's awful
- MFW Trading: Lots of uncertainty
- Prag Leather & Luggage: Repairs busy, luggage quiet

Restarting manufacturing
- A. Greenaways (Natal): Chinese production hit by global slump

Closing
- Via la Moda
- Shoeperama
- The Red Foot travel goods retailer

Changes
- Kennith Barlow is joining the Busby Group.
- Adri Croucamp retiring from the SABS

Murdered doctor was on Leather Sick Fund panel

READ IT HERE - S&V Weekly Newsletter Vol.6 No.23, June 8, 2020

NEWSLETTER ARCHIVE

All the past S&V Weekly Newsletters from January 2016 onwards are available in the newsletter archive.
VIEW THE ARCHIVE - CLICK HERE

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News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za

Next newsletter: Monday 17 June, 2025. Ad and editorial deadline Friday 13 June.

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