The once pariah seems to have found its groove...
The plan is twofold: drive up trading density and enter markets it simply couldn’t under the previous model. Image: Hilton Tarrant/Moneyweb
The new format Edgars outlets being opened under private equity owner Retailability – dubbed ‘community stores’ – ought to have executives of rivals including Pepkor, Mr Price Group and TFG (as well as to some extent Truworths and Pick n Pay Clothing) concerned.
These are unlike the far larger ‘legacy’ stores which the brand operates in major malls across the country.
And they bear absolutely zero resemblance to the sprawling department-type Edgars that many readers of this site would be familiar with, such as the old triple-story colossus at Sandton City.
The first of these new-look stores opened at Resilient Reit’s expanded Irene Village Mall at the end of July.
Any experienced retailer from a rival walking through this store would quickly see what Retailability is going to do here.
The plan is twofold: to drive up trading density, and to enter markets that it simply couldn’t under the previous model. In the Irene Village store, it is clear that every square metre is being put to use and must generate returns.
Just more than half of the store is dedicated to ladieswear, around a third to menswear, with a small kidswear area completing the offer (these ratios will likely be tweaked depending on the market).
The (single) payment counter is at the rear of the store, in front of three modest change rooms. To bridge the gap between clothing and the counter, there is a focused beauty and fragrances offer.
The footprint of this store is around 700m2, and its plan is to have these average around 600m2. This is not that much larger than the size of a Pep store in an urban environment and is about the typical size of an Ackermans.
‘Slimmed down’ offering
The fashion offering is a slimmed down version of what it would offer at its larger stores, but with very few lines aside from its core private label brands.
Ironically, this is not dissimilar to the strategy being pursued by former Edcon stablemate Jet, albeit that the Jet offering is a little more focused on the value segment than Edgars.
Its current plan is to grow the footprint by at least 50 stores over the next two years, which is aggressive.
It currently has roughly 100 outlets, which means the new stores would represent an increase of 50%.
According to reports, it has slashed its total store footprint from nearly 500 000m2 when Edcon slumped into business rescue to the around 330 000m2 now. By March, it intends to operate from a footprint of 10% less than that.
There are two parallel objectives at work here: the cutting of space in legacy stores, and the adding of new ones.
What’s interesting is where it plans to open new stores. Irene Village Mall was never an option until now. So too are areas like Komani (Queenstown) and Jeffrey’s Bay in the Eastern Cape.
You can bet there are many more of these opportunities across the other provinces, especially the ‘outlying’ ones (those not in Gauteng, Western Cape or KwaZulu-Natal).
These are not areas in which Edgars has ever traded.
Where this becomes really worrisome for rivals is that Edgars will be chipping away at market share as well as share of wallet at every location it elects to operate from.
When Retailability gets the model to where it wants to be, it will seize that opportunity – which will necessarily reduce sales among the likes of Pepkor, Mr Price and TFG (with its ‘value’ and core offerings).
What should concern its rivals more is that Retailability CEO Norman Drieselmann has done this all before, many, many, many times. The final piece of the puzzle is selling Edgars, and then retiring.
This article was republished from Moneyweb. Read the original here.
