Cash is king at Mr Price

Mr Price's cautious approach to extending credit to facilitate purchases, not as a revenue spinner, seems to be paying off.

Although the number of accounts has grown from 608000 to 727000, net bad debts as a percentage of receivables have gone up from 1,6% to 4,1%.

This is because the company came to the party late. Last year's figures don't represent the full book either, but one division, Miladys.

The market is also unconcerned by the debt at the group, with no analysts even raising a question about it at yesterday's results presentation in Johannesburg.

And another sign that the group has not gone wild in offering credit to everybody who asks for it is that cash sales are stable at 84%.

Despite this the group has grown market share enough to suggest it is biting into sales at credit retailers. This suggests consumers are ditching credit for cash, and moving to companies offering more value and lower finance charges.

As Mr Price's average selling price is R45, it should continue to benefit from an economic slowdown.

Source: Business Day

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