Clicks Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 1996/000645/06
JSE share code: CLS
TRADING UPDATE FOR 21 WEEKS TO 24 JANUARY 2021 AND CLOSURE OF MUSICA
- Retail health and beauty sales up 8.0%
- UPD turnover up 10.6%
- Group turnover up 7.8%
Retail health and beauty sales, including Clicks and the franchise brands of
The Body Shop, GNC and Claire?s, increased by 8.0% (2020: 8.7%) over the
corresponding 21 weeks in the previous financial year.
Health and beauty sales in comparable stores increased by 4.3% (2020:
5.1%), with selling price inflation averaging 3.2% (2020: 2.4%) for the period.
Total group retail sales increased by 6.5% (2020: 7.7%) and by 3.5% (2020:
4.3%) in comparable stores, with selling price inflation of 3.1% (2020: 2.6%).
UPD increased turnover by 10.6% (2020: 13.9%) with good growth from the
private hospital and independent pharmacy channels due to increased
demand for medicines and healthcare products during the second wave of the
pandemic. Total managed turnover, combining UPD?s wholesale turnover and
turnover managed on behalf of bulk distribution clients, increased by 18.1%
(2020: 8.6%) as the business traded well and benefited from distribution
contracts gained in the prior year.
Group turnover increased by 7.8% to R14.6 billion (2020: increase of 10.2%).
Sales growth (%) Inflation (%)
Retail 6.5 3.1
Distribution 10.6 2.8
Intragroup turnover 9.1 -
Total group 7.8 3.0
Clicks Group chief executive Vikesh Ramsunder said the business continued
to show its resilience as the second wave of the Covid-19 pandemic gathered
momentum across the country late in 2020 and into the new calendar year.
?Clicks reported good growth in front shop health sales as customers focused
on preventative healthcare to boost their resistance levels with immunity-
building vitamins and supplements. Online sales in Clicks continued their
strong growth trajectory, increasing by 173% over the previous year as
shoppers opted for the convenience of home delivery to reduce the risk of
?Trading patterns continued to shift, particularly in December and January, as
the Covid-19 related restrictions imposed by government further impacted
consumer shopping behaviour. This was evident in fewer South Africans
taking summer holidays, particularly to coastal areas where beaches were
closed, and the delay in the reopening of schools from January until February.
?The accessibility of our store network, with over 70% of our stores being
located in convenience and neighbourhood shopping centres, has sustained
our performance during this time as destination shopping malls have
experienced a significant slowdown in footfall during the pandemic,? he said.
Ramsunder added that trading in the early stages of the 21-week period had
been adversely impacted by the protest action at Clicks stores across the
country in the second week of September.
The financial information in this trading update is the responsibility of the
directors and has not been reviewed or reported on by the group?s
Clicks Group?s interim results for the six months to 28 February 2021 are
expected to be released on SENS on or about 22 April 2021.
CLOSURE OF MUSICA
Shareholders are advised that the board of directors has taken a decision to
close the group?s heritage entertainment brand Musica with effect from 31
Musica has closed 19 stores since the start of the 2021 financial year and is
currently trading from 59 outlets. The remaining stores will be closed as
leases expire over the next four months when the majority of leases
Acquired by Clicks Group in 1992, Musica has been the country?s leading
music and entertainment retail brand for several decades.
Musica has been operating in a declining market for several years owing to
the structural shift globally to the digital consumption of music, movies and
games from the traditional physical format. The inevitable demise of the brand
has been accelerated by the Covid-19 pandemic which resulted in the rapid
decline in foot traffic in destination malls where Musica stores are typically
In the stores which have been closed since September 2020, the Musica staff
have been absorbed into the group?s expanding health and beauty store
network. Management is committed to accommodating the remaining staff
within the group where this is operationally feasible.
Further detail on the financial and operational impact of Musica?s closure will
be communicated to shareholders with the release of the group?s interim
results in April 2021.
28 January 2021
Investec Bank Limited
Date: 28-01-2021 08:30:00
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