The company\u2019s Grupo Avenida SA unit nearly doubled its contribution to sales for the year through Sept. 30, accounting for about 4.3 percent of revenue, Pepkor said in an earnings statement Wednesday. The Cape Town-based company now plans to open 50 stores a year in Brazil, double its initially planned rate.<\/p>\n
Success in Brazil will allow Pepkor to consider further expansion in other emerging markets, chief executive Pieter Erasmus said in an interview after the earnings report.<\/p>\n
\u201cThere are a lot of emerging market economies where our skills and capabilities can be leveraged,\u201d Erasmus said. \u201cIf you can make one international market work, it opens up the world.\u201d<\/p>\n
The discount clothing retailer, which started operations 100 years ago in rural South Africa and now has 5,917 stores in 11 countries, has experience in eastern Europe through what is now Pepco Group N.V. It\u2019s previously said it wouldn\u2019t try to compete with that business in the region.<\/p>\n
Pepkor may also consider a purchase in its home market, Erasmus said. While the retailer is \u201cmore focused on organic growth,\u201d it also wants to sell more adult clothing and would consider doing that through an acquisition \u201cat the right price,\u201d he said.<\/p>\n
The owner of South African chains Ackermans, Pep and Tekkie Town is also reviewing its non-core assets such as the building division, Erasmus said.<\/p>\n
After the head of Ackermans was replaced in May, the unit \u2014 which sells mostly baby and kids\u2019 clothing \u2014 showed a clear improvement in the second half. It\u2019s facing intensifying competition from Shoprite Holdings Ltd., Africa\u2019s largest grocer, which has recently opened specialist clothing and baby products stores.<\/p>\n
South Africa\u2019s clothing retailers are facing stock delays because of congestion at the country\u2019s ports, and Pepkor spent 141 million rand ($7.6 million) on diesel fuel in the year to continue operations during recurrent nationwide power cuts, which are also known as load shedding.<\/p>\n
\u201cIn the macro environment like we are in at the moment, with load shedding and ports et cetera, if you make a mistake or are off your game you pay dearly for it,\u201d Erasmus said.<\/p>\n
The company is trying to keep selling prices low, but port delays are adding to costs. For example, while many of the school uniforms Pepkor sells in the January start to the academic year are made locally, more than half of the costs come from imported materials. Supply of imported school shoes may also be \u201cchoppy,\u201d the CEO said.<\/p>\n
Pepkor shares were down 1.1 percent as of 12:26 PM in Johannesburg, compared with a 0.2 percent drop for the eight-member FTSE\/JSE Retailers Index. Pepkor has declined 7 percent this year \u2014 the worst performer among the clothing retailers listed on the measure.<\/p>\n","protected":false},"excerpt":{"rendered":"
Pepkor Holdings Ltd. is increasing investments in Brazil as Africa\u2019s largest clothing retailer repositions its South America operations toward the discount segment.<\/p>\n","protected":false},"author":12963,"featured_media":37466,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,36],"tags":[7,37,38],"class_list":{"0":"post-37469","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-fashion","8":"category-lifestyle","9":"tag-apie-project","10":"tag-fashion","11":"tag-lifestyle"},"yoast_head":"\n