Retail news. Semester 1 of 2014 table of contents

Clothing retailers eye expansion. By: Zeenat Moorad. 24 Feb 2012

Listed retailer Truworths (TRU) will open 19 stores in the second half of the 2012 financial period, it said on Thursday, 23 February. This comes at a time when consumer spending is expected to be stifled amid subdued economic growth and an increase in electricity and fuel prices. The group, which sells Truworths, Daniel Hechter, LTD and Ginger Mary clothing lines, announced that it would open 13 stores in SA and six in the rest of Africa. "Capital expenditure of R132 million has been committed for the remainder of the 2012 financial period," the retailer noted.

On Thursday, Truworths booked a 14% increase in first half profits, as it grew its customer base and increased market share. It said group retail sales increased 10.7% to R4.8 billion for the period, and comparable store retail sales grew 6.2%, while product inflation averaged 8%.

Based on figures from the retail liaison committee (RLC), Truworths' ladieswear clothing market share increased from 22.2% to 22.6% at December 2011 and its menswear market share grew from 21.7% to 22%.

Edcon, SA's biggest clothing retailer said it was also looking to accelerate its space growth.
"Within SA we're targeting close to 5% in the next year and in the next couple of years per annum too. "We opened in Zambia recently and we're evaluating other countries in Africa," CFO Steve Binnie told I-Net Bridge/BusinessLIVE. On Thursday, the company said total retail sales advanced 12.3% for the quarter ended December 31 2011. Same stores sales rose 10.5%. "We're very pleased that we were able to gain some market share in the quarter," Binnie said.

Once known as the retail jewel of SA, Edcon was de-listed from the JSE in 2007 when its shareholders voted in favour of US group Bain Capital's R25 billion takeover bid - one of the biggest private equity deals to take place in SA.

Over the quarter, the company's Edgars Department Stores division, which includes Edgars, Boardmans and Red Square, increased retail sales by 13%, mainly due to strong growth from cellular products, childrenswear and footwear.

Edcon said the number of active accounts for the third quarter was 3.9 million compared with 3.8 million in the year before. Truworths' active account base grew 14% to approximately 2.4 million accounts, in the 26 weeks to end December.

With the opening of Spain's Zara, owned by Inditex, the world's biggest fashion retailer opening its doors in SA late last year, local players are smarting up and streamlining supply chain. Much like the arrival of US powerhouse Wal-Mart, Zara's arrival has been touted as a game changer for the local industry.

Last week upmarket rival Woolworths (WHL) said it would beef up its clothing business after a disappointing performance in the first half.

"If you look at clothing overall, we were slightly behind the market and that was driven by women's wear where we were also behind the market, and that's what we need to fix," CEO Ian Moir said, adding that some categories within clothing like kids wear, women's accessories and lingerie did trade well.

Woolworths clothing sales including Country Road's South African operations grew 11.2%, with sales in comparable stores up 5.9% in the 26 weeks to December period.

"We traded sort of where Truworths did, but not as well as The Foschini Group and we did a bit better than Edgars did," Moir said.

He pointed to a shortened merchandise cycle, as one remedy.

"We want to get more newness, more often - you can't, as a business, do six week drops anymore, back in the good old days that was fine, but not anymore, when you've got competition like Zara and The Foschini Group who are doing a good job on fashion.

"So every two weeks we now drop fashion, it started in late November and we've seen lifts in performance," Moir commented.

Likewise, Binnie said Edcon was focused on being more "responsive". "There are initiatives underway to shortening our cycle," he noted.

Mark Richard Bower will take over as Edcon's CFO from 1 July. Binnie succeeds Sappi's Mark Thompson as CFO on 9 July.

Best Retail Brands - Walmart in a class of its own.

Issued by: Interbrand Sampson 20 Mar 2013

Yesterday in New York, Interbrand announced its global rankings of the Best Retail Brands.

Using the ISO recognised brand valuation methodology, developed nearly thirty years ago, Interbrand annually rates the top retail brands.

Yet again Walmart dominates with a value of $141 billion (R1.300 billion), enough to gobble up most, if not all, of the JSE! Now very active in South Africa and increasingly Africa, through Massmart (Game, Makro, Dion, Builders Warehouse etc.). Reading through the ratings, it is surprising that apart from Walmart none are active in Africa e.g., after Walmart comes Target ($25m), The Home Depot ($23m), Amazon.com ($18.6m), although the latter is of course global.

In the UK Tesco ($10.8m) dominates, followed by Marks & Spencer ($6.5m), Boots ($3.3m). In France it's Carrefour ($10.3m), Germany: Aldi ($2.9m) and Australia: Woolworths (no relation to South Africa) ($4.6m).

While consumer confidence continues to ebb and flow, energy abounds in the US retail sector. The total brand value of this year's top 50 brands is up 1.8%. Of the brands that are on the list again this year, 36 of them increased brand value while only 11 declined. The average brand on the list increased its value by over 6%, up from 4% in 2012. The threshold to earn a spot on the US ranking has increased to US$836 million; last year it took a brand value of US$771 million to make the top 50.

The South African retail scene has shown considerable change of late. Shoprite continues to power ahead, Massmart is now majority owned by Walmart, whilst Woolworths, Mr Price and Clicks have all shown strong growth. Brands that are struggling include Pick n Pay and Edgars. Digital offerings are gaining in importance with Kalahari leading the way. From a branding perspective there is much local fragmentation and huge potential for consolidation. Amazon.com's rapid climb from number 9 in 2012 to number 4 in 2013 is further proof that South African retailers must offer a sophisticated e-commerce model in order to compete on a global scale.

Each year, Interbrand studies what makes retail brands successful and documents their challenges. The brands that succeed amongst the tumultuous backdrop of the retail industry have four things in common:

- Valuable retail brands monitor customer's changing needs. In the race for relevance that is, providing customers with a reason to choose a brand - the strongest relentlessly pursue knowledge about their consumers and incorporate those insights into their everyday behavior. With economic power distributed across an ever-growing portfolio of touchpoints, customers - not the brands themselves - set the rules of engagement.

- Leaders build a culture of efficient decision-making. The pace of retail and customer expectations around speed continues to increase. To respond, executives need to build cultures, processes and systems that enable quick decisions. This isn't just about assortment adjustments. It's about organisational commitment to moving at the speed of the retail world to remain competitive.

- It's understood that experience extends beyond the store. Even the definition of retail is changing. "Retail" no longer refers to physical stores; it refers to the complete experience to products. Retailers witnessing big gains this year have committed to this holistic view of experience. Rather than antiquated methods of maximising stores at the expense of other channels, top brands think in terms of groups of touchpoints and the optimisation of experience.
- The best continuously optimise, scale and measure. The need to move quickly can pressure retail leaders to abandon their commitment to the tasks aligned with optimisation, scaling and measurement. Many do achieve top speed, as the industry demands, where it becomes challenging to evaluate on the fly. Across the top retailers, commitment to ongoing, meaningful measurement and refinement is clear.

"Outstanding retail brands, such as those on our list, are marked by their ability to transform the ordinary into the desirable", says Jez Frampton, Interbrand's Global Chief Executive Officer. "It is these exceptional brands that start new conversations, innovate new models and inspire us all to participate in the cultural experience we call shopping. Congratulations to this year's Best Retail Brands - we can't wait to see what's (Quite literally) in store in the year ahead". Comment by Douglass de Villiers, Group CEO at InterbrandSampson: "Africa as a retail space, with six of the top ten fastest growing global economies, is ripe for development and a mouth watering prospect for all those in mature and stagnant markets. Now is the time to take bold moves towards becoming global contenders".

Top 20 Most Valuable US Retail Brands for 2013

2013 Rank	Brand	2013 Brand value $m %	Change (Brand Value)
1	Walmart	$141.017	1%
2	Target	$25,059	7%
3	The Home Depot	$22,940	4%
4	Amazon.com	$18,625 4	6%
5	CVS/pharmacy	$15,909	-8%
6	Coach	$14,577	8%
7	Walgreens	$14,400	¬4%
8	Sam's Club	$13,514	5%
9	eBay	$19,947	12%
10	Nordstrom	$10,143	7%
11	Publix	$9,941	9%
12	Lowe's	$8,839	2%
13	Best Buy	$8,067	-52%
14	Costco	$7,322	14%
15	Dollar General	$7,107	10%
16	Victoria Secret	$6,105	11%
17	Kohl's	$5,654	-5%
18	Staples	$5,513	-7%
19	Tiffany & Co	$5,159	15%
20	Avon	$5,151	-4%

About Interbrand
Founded in 1974, Interbrand is one of the world's largest branding consultancies. With nearly 40 offices in 27 countries, Interbrand's combination of rigorous strategy, analytics and world-class design enables it to assist clients in creating and managing brand value effectively across all touchpoints in all market dynamics. Interbrand is widely recognised for its Best Global Brands report, the definitive guide to the world's most valuable brands, as well as its Best Global Brands report, which identifies the gap between customer perception and a brand's performance relative to sustainability. It is also known for having created Brandchannel.com, the award winning resource for brand marketing. For more information on Interbrand, visit Interbrand.com.

About InterbrandSampson
Based in Johannesburg, with offices in Accra, Gaborone, Lagos and Nairobi, we act as a hub for Africa. Working in close partnership with our clients we combine the rigorous strategy and analysis of brand consulting with world-class design and creativity. This reach enables us to conduct global research, investigate emerging trends, introduce brands across markets, and better service our clients where they want to do business. Interbrand Sampson has won FinWeek's AdReview 'Best Branding and Design Agency' in 2009 and 2010. Interbrand is a wholly owned subsidiary of the Omnicom Group, the global leader in marketing and corporate communications.

Based in Johannesburg, with offices in Cape Town, Accra, Gaborone, Lagos and Nairobi, Interbrand Sampson acts as a hub for Africa. Increasingly, brands are becoming regional and global. Interbrand serves the world with over 40 offices in more than 25 countries. Working in close partnership with clients combining the rigorous strategy and analysis of brand consulting with world-class design and creativity. This reach enables Interbrand Sampson to conduct global research, investigate emerging trends, introduce brands across markets, and better service our clients where they want to do business. Interbrand Sampson has won FinWeek's AdReview 'Best Branding and Design Agency' in 2009 and 2010. Interbrand is a wholly-owned subsidiary of the Omnicom Group, the global leader in marketing and corporate communications.