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Mr Price Declines as Poor Fashion Choices Hurt Clothing Sales

Mr Price Group Ltd. shares fell the most in almost three years after the South African retailer said low levels of consumer confidence, “some poor fashion calls” and a relatively late winter curbed sales.
By
  • Bloomberg

JOHANNESBURG, South Africa — Mr Price Group Ltd. shares fell the most in almost three years after the South African clothing and household-goods retailer said low levels of consumer confidence, "some poor fashion calls" and a relatively late winter curbed sales.

The stock dropped as much as 10 percent, the biggest intraday decline since September 2012, and traded 8.7 percent lower at 217.88 rand as of 2:52 p.m. in Johannesburg. The shares are 7.5 percent lower this year, valuing the company at 58 billion rand ($4.3 billion).

South African consumer confidence dropped to a 14-year low in the second quarter of this year as unemployment of 25 percent, power cuts and rising fuel prices put pressure on shoppers.

Total sales rose 9 percent in the 21 weeks through Aug. 22, with same-store sales advancing 4.6 percent, the Durban-based company said in a statement on Tuesday. Revenue gained 16 percent in the comparable period a year ago. “Disappointing sales growth for April and May” hurt overall performance, Mr Price said.

“Opportunities in the current trading period were lost in the mens’ and ladies’ junior businesses,” the retailer said. “Despite this, good growth was achieved in most other parts of the business.”

By Janice Kew; editors: Matthew Boyle, John Bowker, John Viljoen.

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