The stronger rand is good news for South Africa's fashionistas, who can expect discounted prices from local retailers who will now be importing for less, says a portfolio manager. Some 70% of South Africa’s clothing is imported, and the rand has strengthened by almost 20% since November.
Portfolio manager at Mergence Investment Managers Peter Takaendesa tells Business Insider South Africa that many retailers have already started promotional activities for cheaper clothing.
Takaendesa expects "aggressive" discounts from one retailer in particular - the Swedish group H&M.
In its latest financial results, the retailer reported a sharp fall in quarterly profit and revealed that it is sitting on $4 billion (R47.5 billion) worth of unsold stock, which it intends to dispose through deeply discounted sales. South African consumers are also expected to benefit from these discounts, says Takaendesa.
H&M was forced to temporarily close its stores in South Africa earlier this year after protests against the promotional image of a black child wearing a sweatshirt with the words "coolest monkey in the jungle". The scandal drew public accusations of racism all over social media and resulted in them having to temporarily close stores after the ransacking of one by disgruntled South Africans.
Judging from the response to its latest store opening, on Friday, at Rosebank Mall in Johannesburg, the retailer may have been forgiven by many. A large crowd visited the store, shopping for the opening specials. By early afternoon, store manager, Lebo Moniki told Business Insider South Africa that an estimated 3,000 shoppers had visited - more than was expected.
"The sales are good," he added, with a smile.
Moniki said H&M has been keeping a careful eye on merchandise and has taken initiatives to promote diversity. No disturbances were reported at the store opening, but as a precautionary measure there was a significant presence of security in the store.
Two customers who wish to remain anonymous tell Business Insider South Africa that they have moved on from the controversial 'monkey ad'. "I'm no longer angry with the retailer since they apologised," one told us.