Business Day chatted to Retailability CEO Norman Drieselmann about the challenges affecting the clothing sector and how chain store Edgars is doing. His firm Retailability bought Edgars out of business rescue in 2020, saving a clothing business that seemed destined for failure after many restructurings did not turn the business around.
Retailability’s brands include Legit, Edgars, Style and Beaver Canoe.
How are Edgars and the group as a whole coping in SA’s weakening economy? Many listed retailers are reporting selling lower volumes of clothing than a year ago.
Trade is indeed challenging across the group as macroeconomic factors take their toll.
However, our unit volume sales have remained resilient due to the price reductions we have instituted at Edgars to maximise customer value and brand loyalty.
The price deflation in Edgars over the past two years has been significant and positions this fashion business squarely in the value segment for a broader customer base. This is now paying dividends as the group delivered comparable growth over April to June.
Is the growing competition, such as Shoprite entering the clothing market and Pick n Pay expanding its clothing stores, making business more challenging?
Our peer set has been on an expansion road map; however, this is not a new phenomenon in retail. Every year there are some retail businesses embarking on an expansion drive.
By focusing on our strategic positioning and initiatives we continue to deliver returns for our shareholders and an improved experience for our customers.
We still feel we have significant growth opportunities in our own group and are staying focused on these.
What do Edgars’ online plans look like?
We are investing in our online business as we see consumers responding to the omnichannel experience. Our aim is to allow our customers to shop in store or online. The Edgars online website is live and helped that business deliver good growth from April to June.
How is Chinese clothing retailer Shein affecting Retailability’s businesses? Anecdotal evidence shows it appears to be reducing sales at Mr Price, Ackermans and most discount players?
Shein is having an impact on the market. It offers a good online service and a very competitive price. The price is in many ways hard to understand.
We are focusing on our omnichannel offering and improving customer service in-store. There is always a place for a balance between in-store theatre and online convenience. Our brands, including Legit and Style, are working hard to achieve this.
Is local manufacturing struggling due to load-shedding?
Load-shedding has had an impact on retailers and manufacturers alike. There has been investment across the board to reduce the breaks in power, which are often worse in outlying towns where many of the factories are based.
We have not shifted order volume away from local vendors as a result [of blackouts] and remain invested in local production.
Trade, industry & competition minister Ebrahim Patel has encouraged local manufacture. How much of Retailability’s clothing is locally made?
Forty-three percent of our stock on order is local.
Retailability bought upmarket children’s brand Keedo from Cape Union Mart earlier this year. How is the integration of Keedo going?
Keedo is fully integrated into Retailability and we have seen good growth already. The plans to rollout Keedo into Edgars have begun with 25 stores now stocking Keedo as a brand inside Edgars. We are proud that we opened our first Keedo store at La Lucia Mall in Durban and the customer response was overwhelming.
You bought about 130 Edgars stores (including the beauty stores) out of business rescue in 2020. How many stores does Edgars have now?
Currently, we have 114 Edgars stores and 15 stand-alone Edgars Beauty stores. The next big opening for Edgars is a store in Vereeniging at Three Rivers Mall in September. Our new concept stand-alone Edgars Beauty store is opening in Hyde Park in October with fantastic support from the cosmetic and fragrance brands.
How many people does Retailability employ?
We employ just over 8,200 staff.
This interview has been edited for clarity and brevity.
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