Tough trading conditions and high running costs have led to scores of businesses in Cape Town closing down in the past 18 months.
Michael Bagraim, president of the Cape Chamber of Commerce and Industry, said about 30 businesses a month had closed over the past six months.
Businesses had been under huge pressure. “The small businesses have complained over the past two years about the increase in electricity prices, the increase in rates and taxes and the increase in transport,” he said.
“The rise in the price of petrol has pushed all the goods sky-high. Unfortunately the recent increase in electricity has been the final nail in the coffin for many of the small businesses.”
Cosatu national spokesman Patrick Craven said the closing of businesses would negatively affect labour. The retail market had become increasingly hard-hit by the emergence of Walmart. “Smaller companies are more likely to be hit by staff shortages, and big supermarkets will then have to cut their labour costs at the expense of the workers,” said Craven.
Several smaller shopping malls in Cape Town, such as the Paddocks Shopping Centre in Milnerton and Fairbridge Mall in Brackenfell, have remained almost empty for months. Many businesses have either closed or moved to better locations.
Music store Look & Listen has closed in Canal Walk and a number of businesses in the Western Cape, mainly in the catering industry, shut down last year. These include Jardine’s Restaurant on Bree Street, The Kitchen Bar in Hermanus, The Bistro in Franschhoek, The Sandbar in Camps Bay and Doppio Zero in Green Point and Claremont. Howard Lazarus, managing director of the Look & Listen Group, which includes Jive City, said the store would be closing. “We are looking at alternative sites outside of the centre. Some of the staff will be redeployed within our 28 other branches and we have assisted in finding alternative employment for some with other retailers,” he said.
Canal Walk chief executive Gavin Wood said the closure of Look & Listen followed a deal between the store and an international brand that wanted space at the mall, which was not otherwise available.
“Look & Listen continues to trade from stores across the Western Cape. While the retail market has been challenging, Canal Walk is performing well with growth in trading densities, low vacancies and high demand for space from both local and international retailers. We continue to work actively with our retailers around… cost-saving initiatives,” said Wood.
Efficient Group’s chief economist, Dawie Roodt, said: “The reality is that the economy is growing slowly and demand for goods is also growing slowly. On the other side, the cost of running a shop, such as rental and electricity, goes up.”
Businesses, especially in the music industry, had also been affected by technology such as smartphones, iPads and tablets. On the other hand, these had had a positive affect on some businesses, such as online shopping, including kalahari.net, and delivery businesses. “It is not necessarily a bad sign that shops are closing – times are changing,” said Roodt.
But it is not all doom and gloom in the city – motorcycle dealership Harley-Davidson has reopened under new management.
The dealership was placed under provisional liquidation in the Western Cape High Court in December, following an application by former owner Turnsil Investments.
It was reported earlier this year that motorcycle sales had declined over the past three years, with a shortfall of more than R2.5 million. However, Jason Nicol, general manager of Harley-Davidson, said the dealership went through a difficult time, which led to its closure, but he was positive that things would return to normal when it opened at the weekend.
Meanwhile, Alex Kabalin, retail executive at the V&A Waterfront, said retail sales there had bucked the economic downturn and were 15 percent up year-on-year in the past 10 months, while international fashion retailer Zara would be opening this year.
Out of business
RESTAURANTS and pubs that closed down last year.
l Liquorice and Lime in St George’s Mall.
l Cheyne on Bree Street.
l The Kitchen Bar in Hermanus.
l The Bistro in Franschoek.
l The Sandbar in Camps Bay.
l The Green Dolphin Jazz Club at the V&A Waterfront.
l Doppio Zero in Green Point and Claremont.
l Nzolo Brand Café on Church Street.
l Wildflour on Regent Road, Sea Point.
l Nando’s in Camps Bay.