Times are tough, but South Africans are still splurging on sports goods and manicures. These chains are booming.
- In a grim retail environment, Sorbet and Sportsmans Warehouse have seen strong sales growth.
- Salon chain Sorbet's sales reached R100 million for the first time, its owner, Long4Life, reported on Wednesday.
- Sportwear and equipment chain Sportsmans Warehouse is opening smaller stores in malls.
- For more stories, go to Business Insider SA.
The latest official retail numbers for South Africa were released on Wednesday – and they were grim.
In March, sales at South African shops were only 0.2% higher than a year before. This was much weaker than economists had expected. Sales were also 0.7% lower than in February, Statistics SA reported.
Higher taxes, higher fuel prices, and a weak economy are squeezing households. This is also reflected in reports from South African retailers, which have been mostly downbeat.
Shoprite, which only managed to squeeze out a 0.2% increase in sales in the six months to end-December, was one of the worst performers. Its headline earnings plummeted by 24%. Sales at Massmart (the parent company of Makro, Game, and Dion Wired) only rose 2.9%, with earnings down a third.
But two chains are doing decent trade, judging from JSE-listed holding company Long4Life’s results for the past year, released on Wednesday.
While customers were seeking “keener priced products”, according to Long4Life, sales at the salon group Sorbet jumped 19% in the past year, reaching R100 million for the first time. Trading profit rocketed by 74%.
South Africa now has 207 Sorbet outlets, of which 21 are aimed exclusively at men, the Sorbet Man chain.
Total sales at Long4Life’s sporting division, which is dominated by Sportsmans Warehouse but also includes the online sneaker seller Shelflife and the ‘athleisure’ maker OTG Active, increased by 10.1%. This is despite prices at the shops falling by 0.9% in the past year.
In a departure from its traditional "superstore" format, Sportsmans Warehouse is now opening smaller stores of around 1,000m² in malls. It has opened three, and is planning more after pleasing sales.
Long4Life, which was created by former Bidvest chair Brian Joffe and listed on the JSE two years ago, also owns a couple of smaller ventures, including a beverage producer that makes the premium mixer Fitch & Leedes and Score energy drinks. Sales of these products grew by 28% over the past year.
Its other retailer, Outdoor Warehouse, only saw 3.3% sales growth as the shorter December school holiday hit camping-gear sales.
In all, Long4Life’s revenue grew its headline earnings by 28% to 38.7 cents and revenue reached R3.642 billion for the year.
Its share price rose by more 4% to 491c on Wednesday – although that was still far from the heady highs of almost 700c it reached in 2017.
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