By Thabiso Mochiko
South African shoppers may be holding on to their purses as recession bites, but this hasn’t stopped Arnd Herrmann from starting an online shop selling luxury branded goods.
Shopping is by invitation only at Luxury4Less and potential customers need to be registered members who have been introduced by the company or friends.
Luxury4Less, which started in March, has agreements with about 40 international suppliers to sell their limited edition designs, off-season goods, overstock items and new products still unavailable in the domestic market. Herrmann says he intends adding local brands to what he calls a “VIP shopping club”.
Www.luxury4less.co.za sells products by brand-name retailers such as Gucci at up to 80 percent below recommended retail price.
It offers clothing, jewellery, accessories, high-end electronic goods and home appliances, as well as luxury outdoor furniture.
“We help those brands to off-sell excess stocks,” says Herrmann. He says that a large chunk of the discounts that he negotiates with his suppliers is passed on to his customers.
If a supplier provides a 50 percent discount, Luxury4Less might pass about 45 percent to its customers, Herrmann says.
The company has tripled its customers in the past two months to more than 15 000.
Filed under: Retail
Large food retail chains, which rely on massive bargaining power to get the best deal possible from suppliers, may do consumers more harm than good. This is implicit in comments in a report on the website of the National Agricultural Marketing Council.
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By Florence de Vries
Chevron South Africa and retailer Fruit & Veg City yesterday announced a 10-year strategic alliance to roll out Freshstop convenience stores across a national network of Caltex service stations. Joining the likes of Engen, which joined up with Pick n Pay last year, Freshstop stores will offer baked breads, fast food, coffee and fresh produce to Caltex retailers. Freshstop stores will be introduced in phases, with conversions of its predecessor, Star Mart, starting in the Western Cape, followed by Gauteng. The initiative follows the roll-out of four trial Freshstop stores in Cape Town. – Florence de Vries
Filed under: Retail
Foschini, South Africa’s third-largest clothing retailer, was upgraded to buy at Bank of America-Merrill Lynch yesterday.
The brokerage raised its 12-month price estimate on the retailer to R54 from R45. Bank of America also increased the retailer’s earnings estimate for next year by 6 percent. – Bloomberg
Two analysts disagreed with Morgan Stanley’s underwieght rating of Lewis Group yesterday. They said the bank failed to consider the quality of the furniture retailer’s management and that its customers were less affected by higher interest rates. But analysts agreed with the overweight given to JD Group, ascribing it to the firm’s settling of contingent liabilities. RMB asset managers said Lewis was a better candidate at this point in the cycle. – Florence de Vries
Two analysts disagreed with Morgan Stanley’s underwieght rating of Lewis Group yesterday. They said the bank failed to consider the quality of the furniture retailer’s management and that its customers were less affected by higher interest rates. But analysts agreed with the overweight given to JD Group, ascribing it to the firm’s settling of contingent liabilities. RMB asset managers said Lewis was a better candidate at this point in the cycle. – Florence de Vries
Filed under: Retail
Department store retailer Stuttafords is reinventing its stores and analysts believe there is a gap in the market for such luxury stores. The firm has spent over R20 million on renovating its Sandton store and plans to refurbish nine stores over three years. It will relocate smaller stores to prominent regional malls while reducing national stores from 18 to 13. Nedcor Securities analyst Syd Vianello believes its competition is virtually non-existent. – Florence de Vries
Interest in sectyor grows, but banks are getting stricter
May 28, 2009
By Lucky Biyase
Retrenchments triggered by the deepening economic meltdown have driven more people to look at investment opportunities in the franchise industry, according to industry specialists.
“Based on the interaction with our clients in general, there is an increase in the number of enquiries from prospective franchisees,” said Bendeta Gordon, the director of Franchise Direction, which conducts research on small, medium and micro enterprises (SMMEs).
But although interest was growing, newcomers were battling to find funding to buy franchises. “Banks are applying more stringent criteria to approving franchise applications,” she said.
“For the period 2006 to 2008 we saw more than 115 new franchised systems being introduced. We expect this number will increase during 2009 and 2010 as companies look at risk-averse ways of expanding their networks,” Gordon added.
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Interest in sectyor grows, but banks are getting stricter
May 28, 2009
By Lucky Biyase
Retrenchments triggered by the deepening economic meltdown have driven more people to look at investment opportunities in the franchise industry, according to industry specialists.
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Edcon, which has been delisted following its acquisition by Bain Capital, had acquired more customers buying on credit after opening 92 new stores, lifting the total number of stores to 1 233, the retail chain said yesterday.
It had raised retail sales by 9.4 percent. Stores existing before the current financial year accounted for 3.2 percent of this rise.
About 52 percent of sales were on credit.
Adjusted earnings before interest, tax, depreciation and amortisation rose to R3.4 billion.
