Clothing retail sector hits the skids
Changing credit patterns play a big part as the golden decade ends, but unemployment and saturation are also factors in slowdown
SA’s clothing retail sector is hanging by a thread after nearly a decade’s strong performance. Factors such as unemployment, credit, competition and saturation in the market are likely to make it nearly impossible for the sector to grow the way it did in its glory days. Retail sales hit a record of 15.5% in September 2006 and averaged about 12% a year between 2004 and 2007. From 2010 to 2015, sales outperformed growth in GDP.She said the tightening of lending criteria by the National Credit Regulator would continue to affect retailers such as Truworths and Edcon because between 30% and 50% of sales were made on credit. Pick said customers were incentivised to take a personal loan with a bank or extend their credit facilities with a bank because it was easier and the terms were better than opening an account with a retailer. "Credit cards and personal loans have become more accessible, with income thresholds as low as R4,000 a month," Pick said. "At the same time, most store accounts...
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