Retail news. Semester 1 of 2014 table of contents

OK revenues surge to US$89m. Herald

Friday, 29 July 2011

By Bright Madera RETAIL giant OK Zimbabwe Limited's revenues for the first quarter of the year grew 56 percent to US$89 million, buoyed by a strong capital injection from South Africa's Investec. Chief executive Mr Willard Zireva, giving a trading update at the group's Annual General Meeting in Harare yesterday, said the new OK Mart store contributed 8,3 percent to total revenues. He said OK Mart was expected to make losses for the first three months but managed to recover in the third month. Mr Zireva said during the period, shrinkage as a percentage of sales had been brought down to below industry levels of about 1 percent. Gross profit margins for the period were recorded at 17,9 percent compared with 17,8 recorded during the same period last year. During the same period, profit before tax grew 500 percent compared with the previous year. "We are expecting better margins going forward. We experienced diluted margins in June during the Grant Challenge (promotion), where we normally have low margins and high markdowns," said Mr Zireva. Mr Zireva added that OK Mart was already breaking even and the group is expecting growth as they continue with their refurbishment exercise, being financed from previous fund-raising initiatives and internal resources. The group plans to open a new branch in Westgate before the end of August. OK now has a lease for Bon Marche Mount Pleasant where they did not have a licence. The shop would also be undergoing refurbishment. Three other shops - OK Marimba, Bon Marche and OK Fife Avenue - would also undergo refurbishment during the remainder of the year. For the full year ended March 2011, OK generated US$257,4 million compared with US$187,5 million in 2010. Capital expenditure for the 12 months was US$9,4 million compared with US$1,5 in the previous year. This expenditure was in respect of refurbishment of branches, replacement of computer equipment, replacement of plant equipment, generators, and on overhauling the operations and distribution vehicle fleet. OK closed the year with 51 outlets comprising 37 OK stores, six Bon Marche stores, six OK Express stores and two OK Mart Stores, which were acquired when the group took over the assets of Makro Zimbabwe in the last quarter of the financial year. OK has continued to import the bulk of its products from other countries as the local market still does not have the capacity to meet local demand.

SA retail giants coming to Zim

Monday, 17 October 2011 00:00 HERALD

Business Reporter SEVERAL South Africa's retail giants could be headed for Zimbabwe to take up space at the multimillion-dollar emporium being constructed by Augur Investments and McCormick Property Development (SA). It had been expected that South African investors, due to their proximity, would set on the great trek up north after the country ended a decade of economic slide in 2009 to record its first growth in a decade.That did not happen as most of them took the same stance as their western counterparts who were hesitant to seize on opportunities presented by the economic stabilisation. Shoprite made a false move for OK, but pulled out at the eleventh hour. But the decision taken by McCormick Property Development in partnership with Augur could be the signature mark that will draw big SA retail giants and see various other investors streaming to Zimbabwe. Augur is an associate of West Group, which recently acquired Red Star. Augur and MPD have partnered in the 50-50 shareholding arrangement to set up the biggest mall in Africa (outside South Africa), which will be known as the Mall of Zimbabwe. The latter is well known for pioneering malls across Africa.Construction of the US$100 million emporium at the Millennium Park (Borrowdale) will start next year and is expected to last for about 16 months assuming all the things remain equal. MPD managing director Mr Jason McCormick said a number of South African retailers, among them Pick ‘n Pay and Spar supermarkets, had already taken up 53 percent of the space. "About 53 percent of the floor space has already been taken up by South African retailers such as Pick ‘n Pay and Spar long before we have launched the project, we had been marketing the project back home," he said. In the next six months the project partners will go on a spirited campaign to enlist local retailers interested in taking up space at the giant mall, as construction will start when all space is committed. The South Africans pledged to comply with requirements of indigenisation saying they were familiar with its characteristics as it was similar to the BEE that occurred in South Africa over the last few years. But they pointed out they initially were sceptical about coming to Zimbabwe due to distortion of facts by international media on the indigenisation process. Augur investments had to bring them here for a first hand account. Augur spokesperson Mr Ken Sharpe said the project was also a result of the vision and understanding of the City of Harare after Augur's proposal. On inquiring for land it could develop, the firm was invited to assist in dualising the Harare International Airport road. "As we complete the airport road, more land will be unlocked for us to develop. "A parcel of land was given to us in return for the work we have done. The sum needed on the airport road is US$68 million," he said. The project is expected to create more than 1 000 jobs on completion. Vice President Joice Mujuru launched the project last week. Local Government Minister Ignatius Chombo, City of Harare Mayor Muchadei Masunda and Information and Publicity Minister Webster Shamu attended the groundbreaking event graced by hundreds of stakeholders.