Its trial Poco store in the Western Cape seaside town of Strand "has reached turnover levels higher than what we expected" since it opened last year‚ Steinhoff CEO Markus Jooste said this week.
"At the moment we are tweaking the product range to align it to South African tastes ... and once we are satisfied that we've got the mix and the product offering right‚ we will start to roll out further stores throughout the country."
Poco is a German mass discount chain that Steinhoff also operates in countries such as Australia. "In a Poco store you can find everything that you need for your house - everything‚" Jooste said.
Steinhoff plans to grow the chain in the Western Cape before taking it to Gauteng.
"We've learnt over the years that you must never do store rollouts far from each other; so we will obviously concentrate in the Western Cape first and build a chain there‚ and then Gauteng will be next‚" Jooste said.
Meanwhile‚ he said Steinhoff had been focusing on cost cutting at its 86%-held subsidiary JD Group ‚ which was performing well from a retail perspective.
JD is in the process of selling its bad-debt-laden and unprofitable loan book to a subsidiary of BNP Paribas‚ which will allow JD to pay off a large portion of corporate debt.
For the six months ended December‚ JD's net profit jumped 95% to R197m when excluding the loan book. Losses from the loan book‚ meanwhile‚ were R1.6bn.
"We streamlined JD's logistics - which were very expensive and cumbersome - so that was one of the big focus areas‚" Jooste said.
"And we also sorted out the supply chain‚ which‚ through the Steinhoff network‚ could be improved substantially. (JD CEO) Peter Griffiths and his team have done a great job to stabilise the business so quickly and to take advantage of what happened in the marketplace.
"And we have certainly taken market share if you look at their turnover growth during this period. I'm very positive about JD as a retail chain for the future‚" Jooste said.
JD had not taken over any leases of stores formerly occupied by failed competitor Ellerines‚ he said.
Shoprite's furniture division‚ a relatively small but growing rival to JD‚ said last month it planned to open 68 new stores by the end of June‚ 53 in sites formerly occupied by Ellerines.
"We've got more than 1‚000 stores so we certainly don't need more‚" Jooste said. JD's results showed the company closed a net seven retail stores in the six months ended December‚ ending the period with 1‚216 outlets.
Meanwhile‚ the Competition Commission said on Wednesday it had recommended that the Competition Tribunal approve Steinhoff's R62.8bn takeover of clothing retailer Pepkor‚ without conditions.
Source: BDpro via I-Net Bridge
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