 |
RETAIL TURNOVER |  |
| R932,7m | ||
| NO. OF STORES | ||
| 208 | ||
|
EXACT! DIVISION
CONTEMPORARY FASHION FOR SOUTH AFRICAN FAMILIES.
POSITIONING
The Exact! division provides modern, contemporary clothing for South African families in the LSM 5 to 7 groups. Carefully selected ranges including footwear and accessories are stocked in the division’s stores, with particular emphasis on clothing and footwear for women and men aged 30 and upwards, as well as clothing and footwear for children aged between three and 12 years.
The concept of value for money is entrenched in the positioning of the brand. This is evidenced by surprisingly affordable prices, a level of quality intrinsic in the product and a shopping environment which is stylish and desirable for customers.
Cellphones complete the product range.
Exact! stores are located in shopping malls, high streets and rural areas, and customers are offered a consistent shopping experience wherever they choose to shop.
REVIEW OF THE YEAR
The division’s turnover grew by 22,7%, with same store growth being 20,4%. The area occupied by the division’s stores, in contrast, grew by 3,0%. This performance confirms that the strategies implemented last year in support of Exact!’s vision to provide “surprisingly affordable fashion to the modern family”, were highly effective. The implementation of these strategies, coinciding with an upturn in the general economy and heightened consumer confidence, led to an increase in the number of new accounts, which in turn added a multiplier effect to the benefits of the better trading environment.
Sales of cellphone products increased by 25%, maintaining the proportion of this category of products to the overall revenue of the division.
| 2011 | % change | 2010 | |
| Turnover (R million) | 932,7 | 22,7 | 759,8 |
| Number of stores | 208 | 1,5 | 205 |
| Floor area (gross m2) | 64 907 | 3,0 | 62 988 |
| Number of employees (including those on flexitime) | 1 244 | 6,4 | 1 169 |
| Most significant countries from which merchandise is imported | China, India, Bangladesh |
China, India, Bangladesh |
| Store location | ||
| % of turnover |
% of m2 | |
| Shopping malls | 48,4 | 49,6 |
| High streets | 28,0 | 24,8 |
| Rural areas | 23,6 | 25,6 |
| A breakdown of sales by product category in the Exact! stores in the 2011 year is set out in the following table: | |
| Womenswear | 23% |
| Menswear | 18% |
| Footwear (for men, women and children) | 22% |
| Childrenswear | 14% |
| Accessories | 3% |
| Smalls | 3% |
| Cellular | 17% |
Throughout the year, the Exact! division placed a strong focus on avoiding increases in prices and even, to the extent possible, lowering prices. Considerable success was achieved in this drive through enhanced price architecture and changes to the product mix. The strength of the Rand throughout the year was a supporting factor.
In line with the group’s strategy, the division made significant progress in the implementation of its supply chain initiatives. Improved speed to market is enabling the division to provide customers with more of the right merchandise where and when it is most needed, thus improving customer service.
Womenswear achieved an outstanding turnaround with sales growth in excess of 27%. Menswear performed to expectation. Sales of footwear grew off a strong base. Boyswear enjoyed yet another year of outstanding performance while girlswear increased sales by 50%, reinforcing the potential cited for this category in last year’s report.
Good progress was made in securing efficient and reliable sources of supply, sufficiently flexible to meet the division’s requirements.
Substantial improvements were made in mark-downs, proving the acceptability of the division’s clothing ranges to customers.
Exact! continued to support local clothing manufacturing through a strong collaborative effort between its buying teams and the group’s manufacturing arm. Local procurement remained at a similar level to the previous year.
While the division did not stock products which benefited directly from the 2010 FIFA World CupTM tournament, a sense of optimism was palpable at that time and clearly extended to the public’s willingness to spend.
During the course of the year the division opened seven new stores, relocated two, renovated five and closed four. Enlargements of the stores in Queenstown, Greenacres and Makado have proved particularly successful.
In line with the group’s overall policy, the Exact! division implemented a number of initiatives to increase the efficiency of artificial lighting in its stores, so reducing electricity consumption.
The division’s development activities for staff members continued to focus on training programmes for store, area and developing store managers, who play a key role in its relationships with customers. Merchant training also continued to be a key focus area.
Staff members supported the Sive Nathi Home for mentally and physically disabled children by contributing their time and raising funds for the home.
| Mark-down statistics | |||||
| 2007 | 2008 | 2009 | 2010 | 2011 | |
| Mark-down value (Rm) | 91,0 | 104,3 | 105,3 | 146,3 | 105,4 |
| % to sales | 14,3 | 15,8 | 15,2 | 20,3 | 12,0 |
STRATEGY
The division’s strategy has been designed to grow revenue and entrench customers’ confidence in the value they receive by shopping at its stores. Specific areas of the business have been identified for exploitation on this basis.
Supply chain initiatives will be expanded in order to reap the benefits of speed to market. Quick response programmes and in-season trading will be enhanced and extended across the business.
The Exact! division is firmly committed to its involvement with the group’s “fast fashion cluster” project which has been initiated in conjunction with the Department of Trade and Industry. This cluster-based intervention aims to develop a local fast fashion capability at its key in-house supplier, TFG Design Centre, and six of its core cut, make and trim (CMT) operations that principally supply womenswear. The project will commence in the next year and is intended to attain its objectives over the next three years.
Through the measurement of every aspect of suppliers’ performance, the division expects to see an improvement in the reliability and efficiency of its supply base.
A new location strategy has been formulated and new stores will be opened extensively over the next four years. During the next year there will be 13 new stores and at least five will be enlarged or relocated, focusing on sites where mass shopping takes place. Two stores in Zambia will be opened. Additional opportunities in Africa will be pursued.
| Store statistics | |||||||
|---|---|---|---|---|---|---|---|
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| No. of stores | 180 | 182 | 198 | 205 | 208 | 222 | 240 |
| Closures | 1 | 1 | − | 3 | 4 | − | − |
| Floor area (m2) | 51 386 | 52 831 | 58 789 | 62 988 | 64 907 | 68 987 | 74 387 |
Strategies to ensure that customers will continue to receive good value for money have been put in place and marketing activities will reinforce the principle of giving customers more than they expect to get for less than they expect to pay. Shop window and in-store branding programmes have been designed to give effect to these concepts.
It remains an objective of the division to provide rewarding careers to all employees, with particular emphasis on people from previously disadvantaged communities.
PROSPECTS
Signs of improved consumer confidence are evident and the division is optimistic about the year ahead. However, rising costs of electricity and transport as well as the current inflation rate environment could place pressure on consumers’ spending.
The Exact! brand places emphasis on the quality of products and the value which customers receive in the division’s stores. Growth in the division’s stores makes these benefits available to expanded numbers of customers, and the division remains well positioned to appeal to its target customers and ready to take advantage of the expected further upturn in the economy.
The division aims to keep its stores stocked at all times with optimally selected and stylish "fashion solutions" (combinations of related clothing, footwear and accessories) selling at moderate prices, designed to appeal to customers aged 30 and upwards and their children.
