Mr Price last year spent Sh137 million to acquire 12 stores as part of its buyout of the franchise from its former partner Deacons East Africa.
The multinational said the Kenyan stores helped boost its sales outside South Africa by 11.4 per cent in the six months ended September.
At Sh412 million, revenue in the period surpassed the Sh378 million turnover posted by Deacons in the six months ended June 2018, reflecting the impact of the franchise loss on the Nairobi Securities Exchange-listed firm.
South African fashion retailer Mr Price suffered a loss of Sh91 million in its Kenyan operation in the five months ended September, largely attributable to start-up costs. The multinational in May last year spent R19 million (Sh137 million) to acquire 12 stores as part of its buyout of the franchise from its former partner Deacons East Africa. “From the date of acquisition, revenue contributed was R57 million (Sh412 million) and net loss contributed was R12.6 million (Sh91 million), affected by one off start-up costs,” Mr Price said in a trading update.
The multinational said the Kenyan stores helped boost its sales outside South Africa by 11.4 per cent in the six months ended September.
At Sh412 million, revenue in the period surpassed the Sh378 million turnover posted by Deacons in the six months ended June 2018, reflecting the impact of the franchise loss on the Nairobi Securities Exchange-listed firm.
Woolworths and Mr Price were the major franchises lost by Deacons, which went into a voluntary administration of PKF Consulting in November after it was unable to pay its debt to suppliers and banks.
Mr Price inherited the staff previously employed by Deacons. The two companies had fallen out ahead of the deal, with Deacons blaming its former partner for its deeper losses in the year ended December 2017.
Deacons says Mr Price reduced its trading margins, initiated the franchise takeover transaction and meanwhile withdrew product supply ahead of the critical Christmas season.
After the takeover, Mr Price launched a website with a detailed catalogue of its men, ladies and kids’ apparel and footwear which are priced in dollars.
A strong online presence is seen as critical in the fashion world that is trying to attract younger shoppers with an ability to view, order and have their items delivered to them.
Most purchases in Kenya, however, continue to be made at the stores that are mostly in shopping malls.
Competition in the formal fashion market is intensifying with the expansion of more brands including Mango and Hugo Boss.
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