- Pepkor is a low-cost retailer whose operations encompass a diversified range of outlets with strong brands in its operations, such as apparel, furniture, electronics, and building materials. The company’s iconic brands, focused on affordable niche apparel operations, reflected a significant slowdown in profits for the six months to March 2023, on the back of cash-strapped customers reducing spending in discount clothing in Pep and Ackermans stores.
- Revenue grew 4.3%, reaching R43.8 billion. Operating profit decreased by 9.8% to R5.1 billion. Headline earnings per share (HEPS) decreased by 11.7% to 80.8 cents. Cost growth was managed below inflation. Market share gains were achieved in key product categories. Load shedding had a negative impact on Pepkor’s performance but the Company increased the proportion of stores with alternative power sources to 74%.
- Pepkor’s CEO stated at the recent group’s result presentation that consumers’ lack of sufficient discretionary funds was a major challenge due to escalating food, energy, and transport costs, as well as high inflation. Overstocking in stores such as Ackermans’ school uniforms resulted in major discounting of apparel to reduce bloated inventory levels, impacting group profits. Management warned of a tough operating environment in the year ahead.
By Ron Klipin