Johannesburg - Department store
Stuttafords, the 159-year-old "Harrods of South Africa", is
closing down, victim of a global shift to online retail and a
domestic economic slump that has put brands such as Ted Baker
and Gap beyond its customers' reach.
Mirroring the fortunes of once-mighty department stores in
Europe and the United States, the doyenne of the South African
high street during apartheid and the two decades since applied
for protection from creditors in October.
However, attempts to revive its fortunes proved futile and
creditors voted in June to wind up the unlisted firm by August 1,
with closing-down sales at its nine stores in South Africa, two
in Botswana and one in Namibia.
In its flagship store in Johannesburg's Sandton financial
district, piles of naked mannequins lay in heaps next to bare
shelves as the last few bargain hunters picked through trays of
heavily discounted perfumes, make-up and clothes.
"We don't know what's going to happen - if we will still
have jobs," said one employee, who did not want to be named for
fear of hurting her chances of staying on. "We only heard that
maybe this shop will be one that will not close."
For South Africa, it is the end of a piece of retail
history.
The first shop was opened in Cape Town in 1858 by Samson
Rickard Stuttaford with the vision of creating a Harrods-like
department store in what was then Britain's Cape Colony.
Its main Cape Town store, opened in 1938, was designed by
in-house Harrods architect Louis David Blanc and echoed the
British store's famous frontage in London's exclusive
Knightsbridge district.
Through various changes of ownership, it never lost its
focus on the middle and upper-class South African market,
despite the economy's failure to recover fully from a deep
recession in 2009 sparked by the global financial crisis.
Chief Executive Robert Amoils could not be reached for
comment but has defended his approach to the tough conditions.
"I believe the path we set was correct," he told business
website Fin24. "We ran out of time. The market downturn was so
swift, so severe."
John Evans, a lawyer overseeing its closure, said he had
received a last-minute approach that could salvage two
Johannesburg outlets, in Sandton and Eastgate, which would save
the jobs of 300 of the group's 950 staff.
"There's a chance we'll save Sandton and Eastgate. If we do,
we should be able to save 300 jobs," he said.
Nearly all retailers in Africa's most sophisticated economy
have struggled as consumer sentiment has hit multi-year lows, a
result of high unemployment and inflation gnawing at disposable
income. The economy is now back in recession.
The slump is piling pressure on President Jacob Zuma, who
faces increasing calls to resign due to a slew of corruption
scandals and accusations of mishandling the economy.
Macy's and Nordstrom in the United States have
also hit tough times, suggesting Stuttafords' woes are not
unique to South Africa, Sasha Naryshkine of local asset manager
Vestact said.
The main squeeze has come from cheaper retailers such as
South Africa's Woolworths, Sweden's H&M and
Spain's Zara.
"The fall from grace in all these department stores is that
people can get the same stuff online and there is a rise of
other quality brands at a cheaper price," Naryshkine said. "In
an economic downturn, people are going to shop down."
Nor is Stuttafords alone.
Footwear and accessories chain Nine West, owned by U.S.
buyout firm Sycamore Partners, and Spanish fashion chain Mango,
whose local licences are held by House of Busby, have closed
stand-alone outlets due to poor sales.
"The brands did not meet the required return on invested
capital hurdles," House of Busby Chief Executive Mark Sardi
said.
Edcon's Edgars, another clothing retailer
ubiquitous in South African shopping malls, was taken over by
creditors last year and had to restructure debt.
In May, no-frills retailer Mr Price posted its
first annual drop in profits in 16 years, while rivals
Woolworths and Truworths flagged lower or stalling