Business Insider Edition

Mr Price says the days of over-full stores – and big end-of-season sales – end this summer

Phillip de Wet , Business Insider SA
 Aug 22, 2019, 02:51 PM
Mr Price
  • Mr Price says sales at its flagship clothing stores were down considerably over the course of the last four months, as it struggled to get its mix right.
  • The clothing chain has run some pretty deep discounts to clear its shelves, and says it is now rid of winter stock.
  • It has promised investors a return to "clarity of offer" – which means less messy shelves and fewer discounts to move clothes people don't want.
  • For more stories go to www.BusinessInsider.co.za.

The Mr Price group has promised investors that its flagship clothing stores will be returning to "clarity of offer" this summer – after two seasons of stores and shelves cluttered with the wrong kind of clothing.

In a trading update on Thursday Mr Price said its corporate-owned clothing stores, under the Mr Price brand, had seen a decline of 5.3% in sales over the last four months on a comparable-store basis.

It took "higher than desired markdowns" on clothing during the winter, Mr Price said, with the additional insult that these discount sales diverted its customers "away from full-price merchandise" – hitting the company in both profit and turnover.

The same thing happened with summer stock, after Mr Price overestimated how much clothing it would sell over the 2018 December period, and ended up offering significant discounts to clear its shelves in preparation for winter.

The company's share price took a big hit in January this year after reporting poor sales for the last three months of 2018, with analysts speculating that its customers may have defected to new offers from H&M and Cotton On, or moved downmarket to the cheaper clothes on offer at Pep and Ackermans.

The most recent problem an "imbalance in the shape of the assortment", the group told its shareholders, referring to the mix of styles, fashion items vs everyday wear items, and the price spread of clothing on its shelves.

Now, however, its shelves are ready for summer, with a return to a clear offer – and it believes the results are already good. 

Its last two weeks of data for August shows that sales in its apparel division, which also includes Mr Price Sport and Miladys, were up 4.3%, the group said. 

  • Indicators
  • JSE Indexes
14.76
0,31%
19.12
0,27%
16.34
0,31%
$1,469.75
-0,1%
56782.44
0,56%
DAILY BUSINESS INSIDER UPDATE

Get the best of our site delivered to your inbox every day.

Sign Up