THE STATE OF RETAIL IN SA: H&M UPDATE AND OTHERS

/in

By Songezo Ndlendele for IOL Business Report

Swedish retailer H&M has revealed plans to open six more stores in South Africa before the end of the year as it extends its reach in the country. This follows on the group’s interim results which showed a 32% rise in sales in rand terms in SA. According to a statement, the rise came at the expense of local retailers such as Mr.Price and Edcon.

 

Arnold Tshimanga, Senior Account Executive at FleishmanHillard said that the clothing sector particularly is under severe pressure, as clothing is classified as “discretionary spend” from a consumer’s budgetary perspective, meaning that when people are short for cash, they cut back in these areas. Furthermore, the entry of international players such as H&M, Zara, and Cotton-on, has put even more pressure on local players like Mr Price, Truworths, Foschini, as well as Edcon, and even a casualty.

 

H&M South Africa country manager Pär Darj, said they see a lot of potential in SA “Three stores will be opened in Cape Town from September to November. The remaining three will open in Witbank, Richards Bay and Durban during the course of the year.”

 

He said that the Canal Walk store in Cape Town – to be opened on November 18, will cover more than 4,600m² on two levels.

 

“We are extremely excited to be opening yet another flagship in the western part of the country,”said Darj.

 

H&M’s expansion comes at a time when local and international fashion brands are finding it harder to survive as consumers are experiencing increased pressure.

International fashion brands Mango and Nine West, which were brought to SA by House of Busby, closed their stand-alone stores in March. British retailer River Island, which has a presence in Rosebank Mall, Sandton City and Mall of Africa in Gauteng, Canal Walk in Cape Town and elsewhere has exited the country in the past month.

Analysts have warned it is going to become even tougher for clothing retailers. Since the beginning of 2017, retailers of textiles, clothing, footwear and leather goods have experienced sharp declines. The Statistics SA retail trade sales report for April showed this segment of goods recorded a 4.7% drop after a 5.1% decrease in March.