Clicks rakes it in on UPD, but closes down the iconic Musica stores

Picture: Karen Sandison/African News Agency(ANA)

Picture: Karen Sandison/African News Agency(ANA)

Published Jan 29, 2021

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Clicks has reported a 7.8 percent increase in turnover to R14.6 billion for the 21 weeks to January 24 and gave insights on its future operations by closing down its iconic Musica stores on the shifting market to the consumption of music, movies and games.

Clicks said it benefited from its wholesale division, United Pharmaceutical Distributors (UPD), which increased its turnover by 10.6 percent from increased demand for medicines and healthcare products during the second wave of Covid-19. The group said its total managed turnover surged 18.1 percent from last year's 8.6 percent as a result of contracts gained a year earlier.

But Clicks said it would wind down Musica as Covid-19 ushered in a rapid decline in foot traffic in destination malls where its stores were typically located.

“Musica has been operating in a declining market … owing to the structural shift globally to the digital consumption of music, movies and games from the traditional physical format,” Clicks said.

Musica has closed 19 stores since the start of its 2021 financial year in September and is currently trading from 59 stores, Clicks said. The remaining stores will be closed as leases expire over the next four months.

Clicks said there would be no job losses a workers would be absorbed into its health and beauty store network.

The retail health and beauty section, which includes the franchise brands of The Body Shop, GNC and Claire's, grew sales 8 percent against 4.3 percent in comparable stores. Clicks said its total retail sales increased 6.5 percent, down from 7.7 percent achieved last year.

Chief executive Vikesh Ramsunder said the business continued to show resilience as the second wave of the 19 pandemic gathered momentum into the new calendar year.

“Clicks reported good growth in front shop health sales as customers focused on preventative healthcare to boost their resistance levels with immunity-building vitamins and supplements,” Ramsunder said.

“Online sales in Clicks continued their strong growth trajectory, increasing by 173 percent over the previous year as shoppers opted for the convenience of home delivery to reduce the risk of contracting Covid-19.”

Ramsunder said the group managed to hold its own despite the difficult environment and pointed out to a consumer changing behaviour necessitated by the Covid-19 related restrictions imposed by the government to contain the spread of the pandemic.

“The accessibility of our store network, with more than 70 percent of our stores located in convenience and neighbourhood shopping centres, has sustained our performance during this time as destination shopping malls have experienced a significant slowdown in footfall during the pandemic,” he said.

Clicks' trading during the 21-week period was also disrupted by a protest action at its stores across the country in the second week of September.

The group is expected to release its half year results in April.

Clicks shares declined 1.44 percent on the JSE yesterday to close at R257.69.

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