S.African retailer Mr Price to source more products locally
* Will source 20 mln more units locally
* Diversifying into other strategic markets
* On-boarded 43 new local manufacturing suppliers
(Recasts, adds CEO comment)
By Nqobile Dludla
JOHANNESBURG, Nov 25 (Reuters) - South African retailer Mr
Price is looking to source 20 million more units of
clothing and homeware locally in a shift away from constrained
global supply chains, its CEO said after the company reported a
rise in half-year earnings.
South Africa's government offered tax incentives in 2019 as
part of a programme to encourage retailers to source more goods
locally, but the recent spate of supply chain problems in Asia
has added urgency to what had been a slow shift.
Clothing and shoe retailers globally are grappling with
strained supply lines that have driven up shipping costs and
times, which means products take longer to arrive in shops.
Mr Price, owner of clothing, homeware and sports chains,
currently sources 40.3% of its products from China and 39.2%
from South Africa.
CEO Mark Blair said the group would increase the units of
its products sourced locally to 100 million from 79.1 million in
the medium term.
"Over the last 12 months we've on-boarded 43 new local
manufacturing suppliers and when you do those kind of things one
of the consequences is that you reduce your dependence on China,
which came down 230 basis points year on year from last year,"
Blair told analysts.
Mr Price is also diversifying into other strategic markets,
which Blair did not want to mention yet.
Similarly, upmarket rival TFG said earlier this
month it wanted to manufacture 30 million pieces of clothing a
year locally within four years, up from 11.5 million currently,
and is adding furniture and jewellery to its growing local list.
Mr Price reported a 34.4% rise in half-year headline
earnings per share, with retail sales increasing 37.8% to 11.9
billion rand ($750.53 million), boosted by acquisitions and
marking a rebound from a low base in 2020 when it was affected
by virus-related lockdowns.
($1 = 15.8676 rand)
(Reporting by Nqobile Dludla; Editing by Emma Rumney and Jane
First Published: 2021-11-25 07:15:23
Updated 2021-11-25 14:19:37
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