"But overall, Steinhoff's retail operations are benefiting from a marked shift in consumers' trading patterns and preferences more towards the value and discount segments of the markets," said Markus Jooste, the group's CEO.
Steinhoff, which also operates in the motor sector through its unit Unitrans, said the logistics business continued to see growth of over 30%, but its motor retail unit was affected by the total market decline.
The parts and services division remained a strong performer on the back of record vehicle sales in the past three years, while Hertz car rental is experiencing declines within the inbound overseas tourist market.
PG Bison and the timber operations within South Africa have been affected by softer demand and pricing pressures within the competitive landscape.
"The success of the newly built particle board plant in the Eastern Cape, coupled with the closing-down of less efficient plants should, however, benefit margins going forward for the remainder of the year," said Jooste.
He added that the group is also investigating the export market as a viable long-term proposition.
PennyPinchers' and Timbercity's 10% growth within the first quarter is mainly as a result of the internal acquisition of Partners' status and the consolidation of franchised and joint venture stores, and is expected to continue for the remainder of the year, the group said.
The group said the trading environment in the UK was challenging and the first quarter revenues and margins were flat, year-on-year. Jooste noted that the raw material division was showing negative growth on the back of slowing consumer demand and the division's exposure to the furniture market within South Africa.
In addition Jooste said that more than 80% of its shareholders have approved a broad based black empowerment deal that will include staff members and suitable community-based and empowerment groups in South Africa.
Within the group's retail operations in the UK, units such as Cargo, which trade in the more affluent market segment, have been disproportionately affected when compared to the value propositions such as Harveys and Bensons that cater for the mass middle market, the company said.
"The demise of major competitors has marred the industry as a whole, but should result in growing market shares for financially sound players such as Steinhoff and one or two others," said Jooste.
He added that the group's exposure to Germany, Austria, and Switzerland, as well as the group's exposure to the value/discount sector within these markets, has resulted in this territory growing in excess of 10% (in constant currency) for the first quarter, and both revenues and margins are expected to be on budget for the remainder of the year.
Margins have benefited from the zloty and forint weakness and the decrease in input prices, said Jooste.
"Sourcing operations is again showing unprecedented growth as the group continues to add volume of own retail operations on the sourcing platform," he added.
The strength of the US dollar has been largely offset by deflation in respect of certain of the group's raw material inputs, as well as improved buying terms due to overcapacity in the East resulting from slower demand.
Logistics costs have also declined as a result of the knock-on effects of the slowdown in global demand and lower oil prices. The group experienced mixed results within the retail operations in the Pacific Rim. Again, results were influenced by the positioning of operations in terms of value versus aspirational consumers.
Revenue grew marginally within the first quarter, but profits, in constant currency terms, are expected to remain flat year-on-year. Since September, trading has shown growth in excess of 5% mainly as a result of the interest rate cuts and corresponding uplift within consumer sentiment, coupled with the new catalogue launched in October.
Trading within New Zealand, which represents less than 1% of group revenues, remains depressed, with revenues and profits substantially down within this region.
Looking ahead, the group said it was confident that its business units in all regions ere well structured to withstand these challenges and to continue to maintain and grow activity levels and profitability.
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