 |
RETAIL TURNOVER |  |
| R679,0m | ||
| NO. OF STORES | ||
| 83 | ||
|
@HOME DIVISION
SELLS A COMPREHENSIVE RANGE OF HOMEWARES AND FURNITURE.
POSITIONING
At the year-end the @home division had 83 stores operating in South Africa’s leading shopping centres and supplying practically everything needed to equip and decorate a stylish modern home.
The @home stores serve the LSM 8 to 10 groups with an offering comprising a full range of homewares. In the @homelivingspace stores, which are larger, averaging about 2 000 square metres in area, there is a homewares range and in addition a comprehensive offering of contemporary furniture. Both categories of store are housed in regional or nodal shopping centres throughout the urban areas. There are also franchised @home stores in the Middle East and in Mozambique.
The store tally in South Africa is divided between 70 @home stores and 13 @homelivingspace stores. There are nine franchised @home stores, seven being located in the United Arab Emirates (UAE), and one in Bahrain, where it is associated with the Al Tayer Group LLC. The remaining store, the latest to be opened, is in Mozambique, operated by Mares LDA.
REVIEW OF THE YEAR
Turnover in the @home division grew by 15,5% over the previous year, assisted by the opening of six new stores. Same store growth was 8,3%. One store was closed. Of the new stores, one is in the @homelivingspace format, located in the I'langa Mall in Mbombela.
A management decision was taken to spend the past year on consolidation and optimisation of the in-store activities of each of the stores in the large-format @homelivingspace segment of the chain, and particularly in settling down the pipeline for new product, and ensuring that the product ranges were optimised. This was undertaken in order to align the stores’ activities with the needs of the market as identified by in-house and external research. The stores which received this attention showed a marked improvement in turnover over the period under review and it is pleasing to report that both the @home and @homelivingspace components gained market share during the year.
As part of ongoing efforts to ensure responsible supply chain management for all its wooden outdoor furniture, the division endeavours to acquire timber only from factories that are certified by the Forest Stewardship Council (FSC) especially if the timber is teak or balau. An important development in the past year was the introduction of a revised auditing process for suppliers, aimed at ensuring that all contractual obligations are being met, including compliance with all legal, ethical, environmental, labour, and health and safety requirements.
Details of the nature of the group’s supply chain management and auditing activities are provided in the Supply Chain and TFG Merchandise Procurement reviews.
| 2011 | % change | 2010 | |
| Turnover (R million) | 679,0 | 15,5 | 587,8 |
| Number of stores | 83 | 6,4 | 78 |
| Floor area (gross m2) | 52 966 | 6,8 | 49 587 |
| Number of employees | 1 011 | 5,9 | 955 |
| Most significant countries from which merchandise is imported | China, India, Brazil, Vietnam, Europe |
China, India, Brazil, Vietnam, Europe |
|
| This table excludes nine franchised stores in Dubai, Bahrain and Mozambique. |
The mark-down factor returned this year to a single-digit percentage, namely 8,4%, and strenuous efforts are being made to reduce it still further.
Trading density for the past year in comparable stores was R17 010 per square metre as against R16 200 in the previous year.
| Mark-down statistics | |||||
| 2007 | 2008 | 2009 | 2010 | 2011 | |
| Mark-down value (Rm) | 39,3 | 47,3 | 46,5 | 72,4 | 65,1 |
| % to sales | 8,3 | 9,0 | 8,0 | 10,7 | 8,4 |
STRATEGY
The @home division will limit new stores to six in the next year in order to focus on training and customer service needs at existing stores across the chain, with the aim of increasing same store growth. In addition costs will be held to a minimum which should boost the division’s profitability.
As the majority of the division’s furniture sales take place in the northern part of South Africa, a state-of-the-art furniture distribution centre will be opened in Gauteng in the next year. This will enable the division to make faster deliveries to customers in that region.
The division’s management team will continue to source optimal products at best prices, in its drive to provide the best possible service to consumers in the homewares arena.
This division will continue to protect its margin while at the same time seeking to gain further market share in the next year.
| Store statistics | |||||||
|---|---|---|---|---|---|---|---|
| Current | Projection | ||||||
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| @home | 49 | 58 | 65 | 66 | 70 | 75 | 80 |
| @homelivingspace | 2 | 3 | 7 | 12 | 13 | 14 | 15 |
| Total No. of stores | 51 | 61 | 72 | 78 | 83 | 89 | 95 |
| Franchise stores | − | 2 | 6 | 7 | 9 | 10 | 12 |
| Closures | − | − | − | 1 | 1 | 1 | − |
| Floor area (m2) | 21 906 | 27 605 | 38 766 | 49 587 | 52 966 | 56 466 | 60 470 |
PROSPECTS
The Rand remains strong and orders for the division’s purchases have been placed through to the end of the year. This should ensure that the division’s pricing remains competitive with price stability from the viewpoint of customers.
The retail environment is showing positive signs of revival which should assist trade in the next year.
The division continues its participation in the group’s supply chain initiatives which have made good progress locally and internationally.