Integrated Annual Report
2019

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Review of operations
OVERVIEW AND PERFORMANCE MATRIX

During the review period, our overriding focus was on improving the customer experience and driving sales growth. We continued to invest in our people, technology, store layouts, merchandising and range. Higher sales were reported across the brands, and the improved satisfaction scores achieved across our various measures are pleasing rewards for our efforts.

RETAIL BRANDS

Nature of business

Leading fashion retailer of exclusive ranges of tiles, bathware and related products.

Strategic positioning Target market
Live beautifully
  • LSM 8 – 10.
  • Discerning consumers in the upper-middle and premium-end segment and Commercial Projects market.
Footprint
  • 1
  • store opened (Clearwater)
    (2018: 1)
  • 3
  • stores revamped (Northgate, The Glen and the webstore)
    (2018: 4)
* Includes webstores.
Key performance indicators Trends 2019 Trends 2018
Sales
Average basket growth
Average selling price
Margins
Net profit
Stock turn
Average store inventory
Key differentiators
  • Trendsetter and leading buyer of exclusive high-quality fashionable international and local products.
  • Widely recognised as the industry front-runner in environmentally sensitive products.
  • Well-established specialist expertise and nationwide network.
2018/2019 priorities Scorecard
  • Develop the talent pool at all levels across the operation.
  • Interrogate our current marketing and media strategy and adapt to evolving market conditions and customer base profile.
  • Continue to build scale in the Commercial Projects division.
2018/2019 major achievements
  • Updated the webstore and digital initiatives, including the successful deployment and implementation of a room-build visualiser, which enables customers in the Commercial Projects and Retail business the opportunity to design and mock-up a room during the selection stages.
  • Achieved improved overall scores on our customer satisfaction reviews.
  • Extended the range of our large-format tile assortment.
  • Successful collaboration with the University of Pretoria to integrate top marketing students into our business on both a temporary and permanent employment basis.
  • Achieved significant progress in expanding and improving the local porcelain tile offering.
  • Made pleasing progress in securing working relationships with identified key accounts for our Commercial Projects division.
2019/20 priorities     2019/20 prospects
  • Explore, determine and implement strategic logistics improvements.
   
  • Expand into Africa with the opening of a new store in Gaborone, Botswana.
  • Complete the transition of the webstore to an upgraded platform with specific focus on mobile accessibility.
   
  • Develop the omni-channel experience underpinned by the new webstore.
  • Intensify employee engagement to drive the continuous development of personnel.
   
  • Enhance and entrench the market profile and presence of the Commercial Projects division to grow its footprint.
  • Optimise the business model to ensure market share and resources are appropriately apportioned between the major components: retail, webstore and the Commercial Projects divisions.
     

Nature of business

Leading specialist retailer of tiles, laminate boards, taps, sanitaryware, shower enclosures, bathroom furniture and accessories.

Strategic positioning Target market
Big savings. More style.
  • LSM 5 – 8.
  • Middle income DIY customers and small builders.
Footprint
  • 92*
    stores
    (2018: 87*)
  • 49*
    corporate
    (2018: 44*)
  • 43
    franchised
    (2018: 43*)
  • 4
  • stores opened in Giyani, Limpopo, Eastgate and Clearwater in Gauteng and Mwanza, Tanzania
  • 9
  • stores revamped and two relocated
  • 0
  • stores closed
    (2018: 1)
* Includes webstores.
Key performance indicators Trends 2019 Trends 2018
Sales
Average basket growth
Average selling price
Margins
Net profit
Stock turn
Average store inventory
Key differentiators
  • Local and international buying power.
  • Year-round value offering with strong fashion component.
  • Integrated supply chain ensuring consistent availability of stock.
2018/2019 priorities Scorecard
  • Focus on product (cost leadership, differentiation and trendsetting fashion).
  • Continue to drive customer-centricity (launch our new marketing strategy).
  • Continue to prioritise our human capital structure and skills development.
2018/2019 major achievements
  • Key leadership changes implemented, including the identifi cation of an equity partner.
  • Opened four new stores and successfully relocated two.
  • Launched a new targeted marketing and advertising strategy to entrench the brand’s relevance across its various customer profiles.
  • Improved the range.
  • Improved our use of analytics and enhanced our internal reporting standards.
  • Our focus on cost leadership delivered good results.
2019/20 priorities     2019/20 prospects
  • Develop the people pipeline to grow capability.
   
  • Open three new stores.
  • Entrench our corporate values and culture to energise our staff and drive sales growth.
   
  • Gain market share, with particular focus on the tile category.
  • Entrench CTM as the fashion leader in our market.
   
  • Continue to drive our customer-centric focus to grow sales.

Nature of business

Retailer of home-finishing products including tiles, paint, ceiling décor, taps, sanitaryware, hardware and accessories.

Strategic positioning Target market
Every price a LOW price
  • LSM 4 – 7 (lower).
  • Entry-level value offering strategically situated in underserviced rural areas and outlying markets in close proximity to urban townships.
Footprint
  • 83*
    stores
    (2018: 77)
  • 16*
    corporate
    (2018: 22)
  • 43
    franchised
    (2018: 55)
  • 10*
    stores opened
    (2018: 13)
  • 4*
    corporate
    (2018: 4)
  • 6
    franchised
    (2018: 9)
  • New stores
  • Gauteng: Southgate, Bruma and Dobsonville
    KwaZulu-Natal: Springfield and Ulundi
    Mpumalanga: KwaMhlanga
    Western Cape: Vredenburg
    Eastern Cape: Uitenhage and Mount Frere
  • 4
  • stores closed
    due to non-performance or for security reasons.
    (2018: 0)
* Includes webstores.
Key performance indicators Trends 2019 Trends 2018
Sales
Average basket growth
Average selling price
Margins
Net profit
Stock turn
Average store inventory
Key differentiators
  • Low cost model.
  • Flexible, opportunistic home-fi nishing product range.
  • Affordability and availability of stock and accessibility to market.
  • Strong community relationships and local marketing.
2018/2019 priorities Scorecard
  • Develop talent and build leadership to enhance succession planning in the business.
  • Launch a new marketing strategy designed to increase and improve market penetration.
  • Capitalise on enhancements made in the buying team to improve the offering and coordinate supply.
2018/2019 major achievements
  • Launched the TopT Training Centre to improve the practical skills and theoretical knowledge of our personnel.
  • Launched the TopT webstore, enhancing the convenience offering for customers. The significant increase in unique visitors per month is illustrative of the brand’s growing online presence. While sales are in their infancy, the trend is positive.
  • Introduced our TopT Gig Rig – a mobile offering which travels around predominantly rural areas, raising awareness of the brand in new or previously underserviced markets.
  • Expanded the lighting range nationally.
2019/20 priorities   2019/20 prospects
  • Implement a Franchise Partner Development Programme with Henley Business School to address succession planning in the business.
 
  • Open seven to 10 stores.
  • Implement and monitor the Business-critical Framework to ensure consistent stockholding and range across all stores to improve the complete solution offering to every customer.
 
  • Increase our national television and radio exposure in line with our growing footprint.
  • Increase participation in regional community projects to raise brand awareness.
 
  • Continue to build on good customer relations through increased management store visits, customer contact and surveys.
  • Activate market disruptor deals and promotional campaigns.
 
  • Explore, and if viable, implement a credit facility offering with a major bank to enhance value to our customers.