Clothing retail group Retailability, the owner of Edgars and Legit, plans to open 30 new stores a year for the next two years as the turnaround of some of its businesses starts bearing fruit.
The group, which acquired Edgars' stores late in 2020, has made inroads in turning around the chain, which five years ago was on the brink of collapse.
“When we took Edgars, 99 of the 113 stores were loss-making — that's not the case any more,” Retailability CEO Norman Drieselmann said in a recent interview with Business Times.
“In the first year, we were trying to build market share back and were able to achieve that. Full-year 2022 was really building momentum behind the recovery. I think we did well, with profit growing nicely,” he said.
“In the full-year 2023 we were able to double prior-year profits. We definitely have stabilised the Edgars brands. So we remain very optimistic around the future performance of the business,” he said.
Since taking over the retail chain, Retailability has opened five new Edgars stores.
“What we have done differently over three years is we tried to entrench our position in the middle market rather than the upper market. Getting the balance right [between] price point range and brand offering to be able to appeal more to middle-market consumers.”
Drieselmann expects strong growth to come from the Legit and Style businesses.
When we took Edgars, 99 of the 113 stores were loss-making — that's not the case any more -
— Retailability CEO Norman Drieselmann
“Legit is without a doubt one of our biggest growth vehicles, as is our Style business. Legit [is] really focused on the young fashion lady and our Style business is targeting that mid- to low-income market that's looking for that something special. And those two formats are where we are investing our capital expenditure.”
Drieselmann said Retailability, which has more than 600 stores across Southern Africa, including South Africa, Namibia, Botswana, Lesotho and Eswatini, has been opening 30 stores a year across all the countries and will continue to do so for the next two years.
“Our expansion plans centre on 30 stores a year, and we feel that's a sustainable opening rate for us. We will open 30 stores a year for the next two years as we have done in the past two years. That's across our brands. Our objective is not to open at all cost but to do so profitably.”
Retailability’s other brands are men's wear retailer Beaver Canoe, which will be rebranded into Swagga, Keedo for kids and Style, men’s and women's contemporary and formal fashion.
Drieselmann said in the next 24 months Retailability will reduce the size of some Edgars stores. The company previously occupied large spaces at shopping malls compared with its rivals at the time. .
“We do believe that Edgars has been overspaced and oversized in the past, and we have embarked on a programme to complete the rightsizing strategy.”
A few months ago, Retailability opened an online store to relaunch the homeware brand Boardmans, part of the now-defunct Edcon group, which was closed in 2018. Drieselmann said in the next nine months, the company will start to look at the potential for a bricks-and-mortar rollout.
“We started small and are targeting some key themes of homeware to understand consumer response. It really is a testing strategy for us at the moment. And we're starting to see some fantastic uptake across both the bedroom and kitchen categories.” .
Commenting on online sales across the Retailability group, Drieselmann said the company “came to the party a bit late”.
“We launched Edgars online only in July 2021. So we are still catching up to the bigger retailers in the marketplace, but we continue to get great growth. Our philosophy behind e-commerce is that it can't be a loss-making strategy. It has to be at a profit centre within Retailability. And we're very proud of the fact that we run a profitable online business that has grown over the past few years and more than doubled in size.”
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