Jewellery under lockdown key, Luxe Holdings store sales dropped 40%
DURBAN – Luxe Holdings, formerly known as Taste Holdings, said on Monday that its same store sales declined by 40 percent during the six months to August, knocked by the Covid-19 outbreak, and it would continue to also focus on driving its online sales as customer shopping behaviours changed.
The jewellery and premium watch retailer fell under the non-essential goods category during the level 5 lockdown and was not permitted to trade after its stores were closed between March 26 and June 1.
Chief executive Duncan Crosson said the lockdown had a severe impact on the group’s sales, with same store sales down by 40 percent while NWJ sales fell by 37 percent and Arthur Kaplan and World’s Finest Watches declined by 43 percent.
“Post lockdown, pent-up demand saw June same store sales increasing by 13 percent, NWJ and Arthur Kaplan were up by 17 percent and World’s Finest watches increased by 10 percent and exceeded expectations,” Crosson said.
During September and October, same store sales continued to exceed expectations with September sales increasing by 5 percent, although NWJ sales were down by 3 percent and Arthur Kaplan and World’s Finest Watches increased by 10 percent, he said.
Luxe’s overall revenue from continuing operations decreased by 42 percent to R127 million due to lost sales and lower trading levels.
However, sales performance since re-opening of stores on June 1 had been resilient, with same store sales for the three months to end August only down by 6 percent compared to the three months to end May that fell by 76 percent.
Luxe said the onset of Covid-19 had accelerated the shift in consumer behaviour to online shopping, with its online sales growing 386 percent from 185 percent on a comparable basis for the half-year.
“Online will continue to be an important focus and driver of sales where we do not have a physical presence, as well as providing an easy convenient modern shopping experience for the current and new younger customer and an alternative safe shopping option for our customers,” the company said.
However, Luxe said post lockdown it had experienced an increase in robberies. Security remained a priority and it had rolled out further preventative security measures to reduce the number of robbery incidents, it said.
Its operating loss from continuing operations widened by 51 percent to R11.5m and headline loss a share improved by 74 percent to 101.7 cents a share while loss a share also improved by 74 percent to 101.7c.
Crosson attributed the improvement to discontinued operations as the remaining food business, Domino’s Pizza and Starbucks, only impacted the group’s results until the liquidation date of March 19.
This comes after Luxe Holdings announced a strategic shift last year and said it was exiting its food business to focus on its luxury retail brands.
Looking ahead, Crosson said trading conditions remained materially uncertain and Covid-19 would continue to impact the group’s earnings for the financial year 2021.
He said the group’s focus now was to strengthen its balance sheet as the company wanted to ensure that it had the resources and reserves to expand as well as survive adverse trading conditions.
“We preserved cash by suspending capital expenditure, but will continue with our efforts to identify business opportunities to invest in areas that will further strengthen the balance sheet and generate the desired return on investment.
“The pandemic has created a more fluid environment in which opportunities are likely to emerge. We are mindful that new opportunities must create value for our stakeholders,” he said.
Luxe’s shares closed unchanged at R1.36 on the JSE on Monday.
POST-LOCKDOWN, pent-up demand saw June same store sales increasing by 13 percent, while NWJ and Arthur Kaplan were up by