The Need for Speed in Design Development and Creative Collaboration

This article was compiled by Alison A. Nieder for California Apparel News

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A global supply chain coupled with increased collaboration between manufacturers and retailers as well as the need to improve speed-to-market is driving apparel makers to look for ways to improve efficiency without sacrificing quality and innovative design.
For many, the answer is 3-D computer-aided design and patternmaking. For the second inCalifornia Apparel News’ ongoing Industry Focus: Technology series, we take a look at 3-D design technology. Executive Editor Alison A. Nieder recently caught up with several apparel technology executives to discuss what’s driving interest in 3-D design technologies and how apparel makers are using 3-D for everything from design development to customer engagement.

Mark Faber

Vice President of Global Customer Success

Optitex.com

We see a combination of operational and strategic motives driving businesses of all different sizes to adopt 3-D. With 3-D, you can create once but leverage everywhere across multiple business processes, from product development and merchandising all the way through to sales and marketing.

One of the biggest benefits on the operational side is time saved. It’s about saving time and costs associated with product development, particularly related to proto and fit samples, by reducing the amount of physical samples needed. Technology also closes the gap between distances, making it much easier for decision makers to see virtual designs and make decisions fast and more effectively. You can speed up collection reviews between a brand’s merchandising, design and product-development teams and between the brands and their vendors. In other cases, it can even extend to the sales and marketing process by reducing costs and time associated with salesman samples, changing the experience of buyers in the showroom, improving store merchandise planning and even photo shoots.

On a strategic level, companies are driven to adopt 3-D with the goal to deliver the best possible product to their customers. Virtual sampling gives merchandisers and designers more color and design options to select from without impacting time and cost of delivery. You can present 3-D samples in any meeting, even without a physical sample, in all colorways. The decision making is happening much faster, and the quality of the product is better as you visualize a true-to-life garment, all months earlier than brands could have done before. In other cases, the motivation stems from a desire to be innovative and leaders in the industry, with forward-thinking technology and a vision of a future that includes consumers interacting with 3-D samples, whether online or in-store.

Regardless of the initial driver for adopting 3-D, the bottom line for all the brands and retailers we work with is that where it starts is never where it ends. Within a relatively short period of getting started, they see additional uses and benefits of 3-D for their whole workflow and implement them from concept all the way to the in-store experience.

Luis Velázquez

Director of Business Development

Lectra North America

www.lectra.com

Leading companies have already squeezed all of the big chunks of fluff time from their product-development calendars. Many of them have also managed to push forward into fabric platforming and tight vendor partnerships, economizing time even further. However, the pressure to reduce time has not waned, and COOs are being asked to push for more. What is the next opportunity? The ability to generate virtual digital prototypes seems to be what executives are looking at now. The genesis of this interest centers on replacing one to two sample iterations with 3-D, thereby reducing total development time and cost accordingly. The added benefit, of course, is that design teams can then generate and review an increased number of product options without added cost. Seeing the same dress with long and short sleeves, for example, requires only a nominal investment in time with 3-D compared to full prototyping.

Sample reductions may have been where it started, but innovative companies are pushing the technology even further, looking to positively impact areas such as on-product marketing and in-store presentation for an ever more inviting shopping experience. For example, some are looking to 3-D virtual prototypes to allow for printing of labels with product renderings. In the past, product rendering on labels was cost prohibitive and nearly impossible to execute because of the time needed to execute samples and photography in every colorway. 3-D has the potential to allow fit protos to be executed in one colorway physically while all other colorways are approved off swatch and 3-D renderings. This means that label ordering can proceed on an expedited timeline, no longer dependent on a physical sample or photo shoot timelines. In addition, merchandising is beginning to use 3-D not only at the product selection/adoption phase but also in designing the product presentations in-store, for stronger visualization of the shoppers’ experience prior to roll out. We have even seen one company use 3-D prototypes as part of a video created to pitch to one of its customers.

Many of the best new ideas for the use of virtual prototypes are coming directly from our clients. We can’t wait to see where this goes next.

Mary McFadden

Executive Director, CAD Product Management

Gerber Technology

www.gerbertechnology.com

Now that companies understand the current applications for 3-D in the value chain, they are starting to think more creatively about additional uses, from textile development to engaging with consumers. What we think of as “traditional” uses of 3-D as well as the promise of less talked about applications are all driving adoption.

There is now a general understanding that product development can save a minimum of two weeks in the development calendar, depending on the average number of prototypes created during the development process. Prior to the sample being created, pattern development is made even more efficient due to the patternmaker’s ability to validate their patterns without having to rely on others to execute a physical sample. Patternmakers quickly become dependent on 3-D as a tool to make the pattern development process more efficient.

For many, the use of 3-D integrates so readily into the collaboration process, they easily expand the audience beyond their original target. We have some customers that planned on using 3-D between design and product development but added the use of 3-D as a sales tool. These customers are also finding that their opportunity is increasing because they are able to present more designs in the line to buyers, virtually. They no longer need to take the time to create physical samples but can present design concepts digitally, increasing their opportunity to have more designs selected.

When designers collaborate with customers, 3-D design provides a more effective tool than flat sketches. Companies that specialize in digital design can more effectively present concepts in 3-D as compared to flat sketches. In a flat sketch the impact of the design is lost and the customer cannot fully understand how the design will look when executed. Leveraging 3-D for this customer interaction reduces the overall cost and time of development but also results in a more satisfied customer.

Another area where we have seen a lot of excitement is in the area of textile development. Textile designers can use virtual samples to test design concepts without creating physical samples or yardage. Scale and proportion can be visualized and modified on a virtual sample quickly to help refine a design concept prior to the expense of physical samples.

There are many other areas of interest from the effects of laundry and reverse engineering of textile properties to dynamic fit and deeper consumer interaction, all of which excite customers’ imagination. All of these areas are driving adoption of 3-D technology. 3-D is clearly here to stay, and the possibilities are really endless. We can all look forward to a more enriched experience as both industry professionals as well as consumers.

Dr. Andreas Seidl

Chief Executive Officer

Human Solutions Group/Assyst

www.human-solutions.com

Discussions with our customers have repeatedly shown that making solidly based decisions fast is becoming increasingly important for them when they’re creating their new collections. Many see the benefits of 3-D, especially in the design process. Our simulation software, Vidya, makes it possible to work with an almost photorealistic image of a product right from the outset. Changes in materials, applications, buttons, stitch types, etc., can be simulated lightning fast. This reduces the risk of wrong decisions and elaborately produced sample pieces. Our customers tell us that they can now do without as much as 60 percent of their sample pieces. This simplifies and speeds up the production process—and naturally generates significant cost reductions. Work goes much faster, especially in the creation of variants and later collections.

Vidya also offers the great advantage of possible integration with our iSize portal, plus the option to work directly with a body scan of the house model, ensuring that sizing and fitting remains highly visible throughout the entire design process. This is a big advantage for sales, for example, when it comes to keeping the number of returns in the online shop as low as possible, and we also offer the Bodyprofiler for this, an ideal complementary software solution. Many of our customers are using 3-D more and more to communicate with their own customers, especially in the online environment—and this means that all those expensive photoshoots are now a thing of the past. Color and material variants can be quickly and easily imaged in the online shop and the house scanatar can be used for virtual try-ons.

Savannah Crawford

Chief Collaborator

Tukatech

www.tukatech.com

Manufacturers are looking for ways to reduce the number of samples and shorten the product-development process. Brands are looking for ways to expand their product offering without risk.

There is a lot of opportunity for improving efficiency in the product-development cycle. When everything was vertical, sample approvals took place with the fit model, designer, patternmaker, and sample maker all in one room. Changes were communicated clearly between the relevant people, and the final sample was approved within a day or two. Now, because of globalization, sample approvals must take place across continents. Sending a sample via courier adds additional cost in both money and time. Language barriers add another layer to the complexities of design interpretation. We’ve tried communicating with tech packs and fit forms, but these methods just add new problems in analyzing fit and design. Lots of companies are now looking for solutions that close the communication gaps in a fast-paced, globalized industry.

With 3-D technology, there is more consistency because the 3-D fit model will have a consistent shape, anywhere and anytime. The live fit models’ bodies are replicated with the correct measurements, shape and posture so that right from the beginning every curve in the pattern is matched to the same figure. In TUKA3D, animation can be added to the models (walking, cycling, dancing, running, playing golf) to replicate live fit sessions. The 3-D operator can verify how the garment is fitting while the model is in motion using different tools within the software. Companies find this advantageous because they are able to achieve a consistent fit between styles. Furthermore, they see an improvement in their sample approval rate because the garment is being analyzed on the same body at all stages of development.

After the fit of a garment is approved, changing the design in 3-D becomes much faster. New details, prints, or colorways are easily visualized on a 3-D garment rather than producing physical samples for every variation. There is more flexibility because images or videos can be viewed anywhere on any device. Instant feedback and collaboration is more easily facilitated between international parties, which gives companies the efficiency they are looking for in their product development and even allows for more ingenuity when marketing to the end consumer.

Because of the limitless variations that can be offered by a brand as a result of 3-D technology, e-commerce companies are able to operate on a made-to-order business model. Hundreds of graphics and prints can be shown on any number of silhouettes, all as rendered 3-D garments. Nothing is made until it’s already been paid for, which means that there is no inventory. The brands do not have to stock thousands of samples in hopes that they will sell, and they can still showcase unique product offerings.

Over 500 brands, retailers and vendors are already using 3-D technology for their product-development processes. Many of them have even eliminated physical sample making, as they have found that there is zero tolerance between what they see on the computer and what they get in real life.

 

Truworths on the Mark

This article was written by Jenni McCann for Cape Business News

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THERE has been a most intriguing side-show unfolding at iconic Cape Town fashion retailer Truworths. In early December the company issued an announcement that top rated French retailing expert Jean-Christophe Garbino had “decided to resign as an executive director of the company and as chief executive officer (designate.)” So far no official explanation has been given for Garbino’s decision to walk away from a plum job – a job that, by all accounts, he was very enthusiastic to take up. In any event, long serving CEO Michael Mark – a legend in fashion retailing circles – will now extend his tenure as boss of Truworths until at least the end of 2017.

The resignation of Garbino is not entirely surprising since a number of fashion industry wags had commented cynically on the prolonged stint the Frenchman endured as CEO designate. According to reports from last year’s AGM, Garbino was briefly introduced to shareholders, but played no role in the meeting (and apparently sat with the assembled shareholders and not at the table of top executives.)

In truth, there won’t initially be too much fuss about Mark remaining in the hot seat. Mark’s long-term track record is enviable … perhaps only matched in local retailing by Shoprite’s Whitey Basson. But there have been questions around whether Garbino’s mysterious resignation effectively compromises succession planning, and robs Truworths of a fresh perspective on its enlarged global operations.

Only time will tell whether a CEO with more than two decades of executive experience at the company will reward shareholders better than having an internationally renowned CEO overseeing the global growth of the company. Most Cape Town-based retailers – including Woolies and Pick n Pay – have seen regular changes to leadership. But it would be far fetched to claim that shareholder returns could be linked to whether companies sought enduring leadership or pursued regular changes in the guard.

In the meantime Truworths’ interim results to end December 27 are the only tangible evidence that can be gleaned in determining whether all is still well at the fashion retailer.

There is also the Truworth board’s confirmation that confirms that the group’s strategy of pursuing organic growth and acquisition opportunities will continue under the leadership of Mark.

In the interim period Truworths’ sales jumped 36% to R8.5bn with encouraging cash sales growth of 85% and credit sales growth of 16%. But if the retail sales reported by the recently acquired UK-based Office Retail Group Limited (Office,) Earthchild and Naartjie were excluded, then retail sales increased by 15% to R7,2bn with cash sales growth of 16% and credit sales growth of 15%.

Looking at comparable store retail sales for the period, the increase in sales was 10% (with product inflation averaging 9%.)

The comparable store sales figure is a key consideration since a net 46 stores were opened across all brands while the retail footprint was boosted by the above mentioned acquisitions (which added 224 stores.)

Still, the sheer scale of the new look Truworths organisation is staggering with 932 stores. However, it is important to note that the company’s gross margin decreased to 54.2% (2014: 55.3%) due to the acquisition of Office, which operates at a lower gross margin.

Mark, though, reassured that the gross margin was still within the current target range of 54% to 57% (set before the acquisition of Office.) He said if Office was stripped out of the interim numbers then the gross margin was level at 55,3%. The enduring Mark’s biggest challenge ahead is that the South African trading environment is expected to remain challenging for the rest of the year with further interest rates on the cards. He contended that Truworths was well-equipped to deal with environmental challenges.

He pointed out that Truworths had extensive experience in managing the risk of its mainstream ‘better-end fashion.’ through proven merchandise design and buying processes. He added that managing credit risk through ongoing application of strategies and best of breed sophisticated systems would ensure a healthy debtors book.

Happily for Mark, he could at least report that Truworths retail sales (excluding Office) for the first six weeks of trading in the second half of the financial year increased by around 17%.

Retailing sows profits for clothing business

This article was written by Marc Hasenfuss for BDLive

Monatic

ENDURING empowerment company Brimstone Investment has sewn up profits at its 100%-owned clothing manufacturing subsidiary House of Monatic (HoM), with the help of a fashion retailing thrust.

At an investment presentation last week, CEO Mustaq Brey disclosed HoM had increased revenue 17% to R214m, with net profit coming in at R6.4m. He said HoM — which manufactures brands such as Carducci and CSquared — had increased its share of the corporate wear and retail segments.

Although investors attending the presentation agreed that HoM’s achievement was noteworthy in a local clothing manufacturing sector in which margins had been torn to shreds by cheap imports, they did say that HoM was one of Brimstone’s peripheral investments.

Brimstone’s intrinsic value table places a book value of only R45m on HoM, which is also understood to hold valuable industrial properties.

This pales in comparison to the company’s main investments such as fishing conglomerate Oceana (R2bn) and Life Healthcare (R1.5bn).

But HoM was one of Brimstone’s first investments after its formation in the mid-’90s. It was acquired from the late Doug de Jager’s Lenco Holdings.

Mr Brey said HoM’s retail initiative — selling clothing through factory shops, show rooms and CSquared boutiques — was gaining traction.

He said there were now five boutiques in Cape Town, Durban and Johannesburg, with plans to roll out another two this year, including at the Mall of Africa.

Mr Brey discounted suggestions that Brimstone could drive a fully fledged retail rollout at HoM. “Basically, we have been short of orders from major retailers … they simply are not ordering enough from us. So, we use our capacity to supply our own stores.”

He said retail sales now represented 15% of turnover.

Market watchers have pointed out that HoM’s retail ploy is not dissimilar to a successful tactic adopted in the 1990s by Rex Trueform (Rextru), a fashion retailer that has Brimstone as a 22% shareholder. For decades, Rextru was focused on clothing manufacturing, before launching the Queenspark fashion chain, which is now the main profit driver at the company.

However, any notions that Brimstone could usher HoM’s retail endeavours closer to Rextru seem unlikely.

Brimstone’s recent investment presentation made it clear the shareholding relationship with Rextru was a tense one.

Brimstone chairman Fred Robertson voiced considerable displeasure at Rextru — including arguing that the company’s nonexecutive chairman Michael Krawitz was grossly overpaid.

Mr Robertson said Brimstone’s influence as a major shareholder was negated by Rextru’s “double pyramid” structure, involving N-shares and holding company African & Overseas Enterprises.

“We’ve tried to rock the boat, but the pyramid is solid.”

Mr Robertson added that sometimes Brimstone was loathe to complain about the frustrating situation at Rextru. “We worry the JSE will delist Rextru, and then the company will be hidden away.”

Last week, Rextru reported that headline earnings for the six months ended-December improved 48% to 65.3c per share.

East Africa: The next hub for apparel sourcing?

AAA

This article was compiled by Achim Berg, Saskia Hedrich and Bill Russo for Mckinsey and Company.

In the past two years East African countries—in particular, Ethiopia and Kenya—have the potential to become bigger players in garment manufacturing. But the road ahead won’t be easy.

In the past two years, a number of European companies—among them, H&M, Primark, and Tesco—began sourcing some of their garments from Ethiopia. The rest of the apparel industry took notice: since 2013, there has been rising interest in not just Ethiopia but also other East African countries as potential sourcing destinations for apparel. Also contributing to the buzz is the renewal of the African Growth and Opportunity Act (AGOA), which gives certain countries in sub-Saharan Africa duty-free access to the US market.

What is the true potential of East Africa to grow into a major garment-sourcing hub? To find out, we visited factories in the region; interviewed stakeholders, including manufacturers and buyers; and analyzed market data. In addition, we conducted our third survey of chief purchasing officers (CPOs), this time with a series of questions focused on East Africa. This year, 40 apparel CPOs, representing a combined $70 billion in 2014 purchasing volume, responded to our survey. We found that East Africa could indeed become a more important center for apparel sourcing, but only if stakeholders—buyers, governments, and manufacturers—work together to improve business conditions in the region.

Up-and-coming sourcing countries

Nearly three-quarters of survey respondents said, as they did in 2011 and 2013, that over the next five years they expect to reduce their purchases from Chinese firms. Chinese apparel production has indeed fallen since 2010—but China remains the undisputed giant of garment manufacturing, with approximately $177 billion in apparel exports in 2013.

Among CPOs surveyed, Bangladesh remains at the top of the list of future sourcing destinations, with 48 percent of respondents including the country in their top three (Exhibit 1). And 62 percent said they intend to increase their sourcing value from Bangladesh over the next five years. The next two up-and-coming countries are Vietnam and India, where, respectively, 59 percent and 54 percent of surveyed CPOs plan to increase their sourcing value in the next five years. Yet the combined apparel exports of Bangladesh ($24 billion), Vietnam ($17 billion), and India ($17 billion) still amount to less than one-third of China’s.

For the first time in our survey, African nations appear on the list of countries expected to play more important roles in apparel manufacturing. Ethiopia, notably, is seventh on the list.

Foschini eyes UK retailer Whistles

wHISTLESWritten by Ashley Armstrong and Ben Marlow for the Telegraph. Foschini, the South African owner of womenswear retailer Phase Eight, is understood to be circling fashion brand Whistles.

The high street chain, which counts the Duchess of Cambridge as a fan, has called in advisers at KPMG to prepare for a sale and is already fielding interest from a clutch of prospective buyers.

If Foschini succeeds with a takeover of Whistles, it will be the latest South African company to snap up a British retailer, following a wave of deals.

Last year Brait, the investment vehicle controlled by South Africa’s richest man, Christo Wiese, bought New Look in a £1.9bn deal, while Truworths acquired footwear business Office for £256m.

Steinhoff International has also entered into a bidding war for both Argos and London-listed electrical retailer Darty in the past few weeks.

The Duchess of Cambridge is a dedicated fan of Whistles
The Duchess of Cambridge is a dedicated fan of Whistles CREDIT: TIM ROOKE / REX FEATURES

South African companies have been looking at ways of diversifying their sources of revenue beyond the rand, which has weakened by around 23pc against the dollar in the past year amid political turbulence.

Cape Town-based Foschini, which runs 2,000 stores across South Africa, bought Phase Eight last year from private equity firm Towerbrook in a move aimed at boosting its international expansion.

Chief executive Jane Sheperdson, the former boss of Topshop, continues to own a sizeable stake in Whistles after she engineered a management buy-in in 2008 with the backing of Baugur, the Icelandic investment firm.

The deal, which saw her and senior management take a 20pc stake, was refinanced a year later at the height of the financial crisis by other Icelandic investors after Baugur collapsed into administration.

It is not clear whether prospective buyers are being offered a stake or full control of Whistles, which has been judged to have been revived under Ms Sheperdson’s stewardship.

Whistles’ last available accounts showed that annual sales increased by 9pc to £63m but the fashion retailer swung to a pre-tax loss of £2.4m on the back of the costs of launching in the US and starting a menswear range. The business also spent £434,000 on a runway show at London Fashion Week.

Whistles has 49 stores in the UK and 76 concessions in shops including in Harvey Nichols, Selfridges, Harrods and Bloomingdales. Whistles and Foschini declined to comment.

 

The Italian driving fashion’s mobile revolution

italian

With his high-waisted jeans and sneakers, nobody could have accused Steve Jobs of being a style leader.

Milan (AFP)

Posthumously however the Apple founder is becoming an icon of the luxury fashion business as the smartphone technology he pioneered shakes up a sector of the industry initially slow to embrace the Internet.

Ask Federico Marchetti, the Italian CEO of Yoox Net-A-Porter (YNAP), the fashion e-tail heavyweight that shifted 1.7 billion euros worth of designer gear and luxury goods last year.

“Around 50 percent of our sales came from people ordering on smartphones,” Marchetti told AFPTV in an interview at Milan fashion week.

“Frankly speaking if the iPhone had not been invented that figure would be much lower. So I have to say thank you to Steve Jobs. It is thanks to him that we can do our business.”

The group now headed by Marchetti was created by last year’s merger between his own Yoox.com and London-based but Swiss-owned Net-A-Porter (NAP).

On paper it was a match made in business heaven but it was not an easy birth: NAP’s founding shareholders were left grumbling about their stakes being undervalued and its American-born creator Natalie Massonet left the new company as the fusion neared completion.

Marchetti meanwhile was acclaimed for having pulled off the deal of a lifetime by persuading NAP’s Swiss owners, Richemont, to allow Yoox to effectively take over a rival that had bigger sales but was struggling to turn a profit.

According to unaudited, pro-forma figures, the new business had combined sales of 1.7 billion euros in 2015, up 31 percent on 2014.

– ‘Boutiques here to stay’ –

Marchetti, 47 this year, says YNAP is on the cusp of something much bigger as the industry arrives at a digital tipping point.

“I created Yoox in 1999 and at the time it was quite hard to persuade some designers to be on the Internet,” the art-loving entrepreneur recalled. “Now I can see that the vision I had is getting there.

“There is a strong convergence between fashion and the Internet, especially through mobile. It has helped a lot and mobile will be the key to the future.”

Online sales currently only account for around five to six percent of top end fashion sales around the world. Analysts estimate that the figure could triple or more inside a decade but nobody really knows how quickly the online revolution will unfold.

Top luxury brands have long been able to command margins in excess of 20 percent, giving them a powerful incentive not to tamper with their business model.

Customers will never want to give up visiting boutiques and being able to see and touch the clothes before they buy them, Marchetti was frequently told when starting out.

That is changing. As well as operating its own sales platforms, Yoox manages in-house online for dozens of brands including Armani, Valentino and Alexander McQueen — an activity that contributes 10 percent of YNAP’s turnover.

But its CEO insists the shutters will not be coming down on designer boutiques.

– ‘Apps not India’ –

“I have never been a fanatic,” he said. “I believe in the hybrid model where the physical shops will be helped by online, as is happening now with half the purchases in-shop driven by (research on) the Internet, and vice versa.”

Marchetti believes the next wave of growth will be powered by a new generation of dedicated fashion-retail smartphone apps, something he sees as even more important in the short term than the potential of emerging markets.

“I see something more tomorrow in the smartphone rather than India,” he said.

Marchetti also plays down the “see now, buy now” trend which has seen the likes of Tom Ford offering their new clothes to customers as soon as they are shown on catwalks, rather than making them wait for the appropriate season.

Giorgio Armani is among those to have poured cold water on a trend which, if it took off, could sweep away the system of twice-yearly fashion weeks in Milan and elsewhere linked to the northern hemisphere’s seasons.

“There will be a gradual change but, especially for brands focused on luxury, it will take a longer time,” Marchetti said.

Italian handbag designer Francesco Visone said young creatives recognise that change is fashion’s new normal.

“With a disruptive wave, either you ride or it destroys you,” he said. “Business is not like 30 years ago, everything is consumed more quickly and Yoox saw that coming.”

Israeli-Italian designer Daizy Shely said she had seen interest in her fledgling brand surge after she had a Marabou feather jacket showcased on Net-A-Porter.

And she also embraces smartphone shopping as a consumer. “When you are in a shop in Milan everyone is jumping on you and they won’t leave you alone,” she said.

“My mum loves that but for me, I want to be sitting on my bed alone in an online shop. Whatever I want is arriving to the house like a gift. I think I am addicted to this.”

© 2016 AFP

Plunging consumer confidence leaves Edcon with slumping sales

edcon

This article was written by Janice Kew for BDLive
EDCON, SA’s largest clothing retailer, said third-quarter sales slippedas consumer confidence in the country approached a 14-year low.

Retail sales at the owner of the Edgars, Jet and CNA chains fell 1.7% to R8.69bn in the three months to the end of December,Edcon said on Friday.Cash sales climbed 4%,while transactions settled at a later date dropped 9.9%.

South African retailers and consumers are under pressure as the country’s worst drought in more than a century pushes prices higher, with December food inflation climbing to 5.8%. Meanwhile, a weakening rand prompted the central bank to raise interest rates 50 basis points in January, increasing repayment costs for those with loans or mortgages.

“The overall trading environment remained challenging during the current quarter primarily due to higher income taxes, rising unemployment, rising interest rates and a sharp depreciation in the rand,” the company said.
Bain Capital Partners, based in Boston, US, bought Edcon for about R25bn in 2007 to tap into rising economic growth in Africa’s second-largest economy. The deal burdened the retailer with debt, which increased 4.1% to R22.6bn year-on-year.