Sales figures point to poor outlook
Local clothing retailers are increasingly competing against astute international brands, says analyst
The rest of the year is bound to be uncertain for local retailers, with many of the problems encountered towards the end of 2016 resurfacing and worsening. This is reinforced by the latest Statistics SA data, which show retail sales in February 2017 declined 1.7% compared with sales in February 2016. This comes after January’s 2.3% year-on-year drop. Once again, retailers in textiles, clothing, footwear and leather goods recorded the sharpest decrease at 7.6% — worse than the 6.5% fall in sales of household furniture, appliances and equipment. EY consumer products and retail sector leader Derek Engelbrecht said an overtraded clothing market resulted in squeezed margins and falling volumes. Based on the most recent six-month results, the listed clothing retailer that was hit the hardest was Truworths. Mr Price Group’s margins and volumes declined slightly, while TFG held both steady. "Clothing retailers face a multitude of challenges: increasing foreign competitor presence and scale;...