Building materials retailer Cashbuild, which has paid half of its rent in April, says it will enter into negotiations with its landlords after the national lockdown has been lifted to settle the outstanding amount.
The retailer, which resumed business on April 18 after the easing of the lockdown regulations on some industries, said it will negotiate with its landlords to reach a “mutually acceptable settlement for this unique event”.
SA has imposed a five-week lockdown that has halted economic activity and hit the retail sector.
Cashbuild, which has market capitalisation of R3.5bn, said it reduced trading hours during the period while operating under strict guidelines. It only sells hardware, components and supplies used for essentials services such as the provision of water and electricity.
Cashbuild expects its current working capital credit lines to be sufficient for the company to weather the effects of an extended lockdown. The retailer said it had paid its employees full remuneration during the initial lockdown from March 26 to April 16 and will do so for the extended period. The lockdown has been extended to the end of April.
Cashbuild said in an operational update that total revenue decreased by 1% in the third quarter because of the underperformance of its existing stores in the first three months of 2020.
The retailer said revenue for its 297 existing stores fell by 4% from January to March, while its new stores which have been opened since July 2018 increased growth by 3%.
Transactions through tills fell by 7% in existing stores while increasing by 3% for new stores.
By the end of the three-month period, the retailer had a total of 318 stores including 226 Cashbuild and 61 P&L Hardware stores in SA.
The group, which has been in business for 42 years, said in early March that it expects trading conditions to remain weak throughout the financial year due to gloomy economic growth prospects and waning consumer confidence.
The company’s share price was unchanged at R140 on Wednesday while it had lost 37.77% so far this year.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.