Steinhoff International sales hurt by global lockdown
JOHANNESBURG - STEINHOFF International has said the Covid-19 outbreak and trading restrictions imposed worldwide in March had a negative impact on its sales during the nine months to end June as some of its stores were closed.
Steinhoff said on Friday that while almost all its stores had reopened by the end of June, a significant amount of trade had been lost while they were closed. “Initial post-lockdown trading was better than expected, as stores benefited from pent-up demand at reopening, but the sustainability of this demand is uncertain,”
Steinhoff said. “The group’s main trading subsidiaries, with their more resilient and defensive discount and value offering, are confident that they are well-positioned to gain market share in the postCovid-19 ‘new economy’.”
The group said trading restrictions and store closures resulted in a 6 percent decline in revenue from continuing operations to €6.76 billion (R134.46bn). It said the full impact of Covid-19 on its 2020 financial year remains uncertain.
Steinhoff owns brands such as Pepco Group, Conforama, Poundland, Mattress Firm and Pepkor Africa. Pepkor Africa, the largest retail store footprint in southern Africa with more than 5 500 stores operating across 11 African countries, saw its revenue declining by 10 percent to €2.97bn.
The group said Covid-19 and the restaurant national lockdown constrained sales during the third quarter, slicing 17 percent off its revenue in constant currency during that period. The group put an estimate of approximately €285 million in lost revenue but it achieved very strong trade in May and June as lockdown measures started to ease and the group attributed this to pent-up demand and the positive impact of social grant payments, as well as the value focus and market positioning of the group’s brands. Pepkor opened 22 new stores during the third quarter.
The Pepco Group reported a 2 percent increase in revenue to €2.61bn in the nine months to end June. Conforama, which has more than 80 stores in Spain, Portugal, Italy, Luxembourg, Croatia and Serbia, reported an 18 percent decline in revenue to €566m, with the revenue reduction experienced across all product types.
Mattress Firm, a specialty bed retailer in the US, reported a 7 percent increase in revenue to €2.04bn, but revenue was down by 11 percent in the third quarter as a result of store closures due to Covid-19 trading restrictions. Meanwhile shareholders rejected the retailer’s 2019 financial results and the group’s remuneration policy following a virtual annual general meeting on Friday. Chairperson Moira Moses said she was disappointed that the proposals were rejected but said the board respected the decision.