South Africans rushed to buy bling when hard lockdown ended – but it didn’t last
- After the harder part of lockdown ended, South Africans rushed out to buy jewellery and watches, one set of data shows.
- But the pent-up demand quickly dried up – and buying slowed to a trickle relative to 2019.
- Most analysts have predicted a slow recovery for the luxury sector, with disposable incomes hit hard, and those who have money hanging on to it.
- For more stories go to www.BusinessInsider.co.za.
When the hardest part of lockdown ended, South Africans all but mobbed stores in search of the jewellery and watches they had been banned from buying due to the pandemic, a new set of numbers shows.
Then they stopped buying again.
On a same-stores basis, its NWJ jewellery chain saw a 17% increase in turnover in June, compared to the same month in 2019, JSE-listed group Luxe Holdings said in information attached to its interim results released on Monday. At the Arthur Kaplan and "World's Finest Watches" stores, the increase was 10%.
That had exceeded its expectations, the company said, after trading in such luxuries was allowed again from 1 June, after a little over two months of hard lockdown and retail restrictions.
The effect was quite short-lived, however. Despite that healthy June, the three-month period to August saw a same-store decline of 3% at NWJ, Luxe said, while sales at Arthur Kaplan/World's Finest Watches dropped by 8%.
As the country settled into a new normal, things grew more variable. Between the two chains it recorded a 5% increase in (same-store) revenue in September, the company said – and then a drop of 4% again in October.
It is still betting on a big Black Friday and Christmas-season boost, Luxe said, but is "navigating through the new normal on a cautious basis given the considerable uncertainty and unpredictable trading patterns, coupled with a distressed consumer and footfall in the shopping centres has not returned to pre-lockdown levels."
Like everyone from clothing retailers to grocery stores, Luxe said it had found community and neighbourhood stores outperforming the big regional nodes where retail space had previously demanded a rent premium.
Most analysts have predicted that retail sales in general, and luxury sales in particular, will recover slowly in South Africa, as the number of people with disposable income continues to shrink, and those with money continue to be cautious in spending it.
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