APRIL 2012 MARCH - Mr Price Group
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PRICELESS ( VAT I N C L )
TAKE AN INSIDE
LOOK AT OUR
MR PRICE
FAMILY
ONLINE SALES
ANNUAL INTEGRATED REPORT
PLATFORM LAUNCHED -
WWW.MRP.COM
APRIL
2012 GROUP POSITIONS
MARCH ITSELF FOR THE NEXT
PHASE OF ITS GROWTH
2013
Test stores in
Nigeria and Ghana
deliver strong results
“A celebration WELCOME
of the individuals who TO THE
make it all happen” MR PRICE
STUART BIRD
CHIEF EXECUTIVE OFFICER - MR PRICE GROUP LIMITED
GROUP
LIMITED
ANNUAL
INTEGRATED
REPORT
2013
15
OUR
VALUES
06 Scope and Boundary
07 2013 Highlights
08 2013 Under Review
10 Our Business
12 Our Footprint
14 Business Overview
29
26 Stakeholder Engagement
29 Chairman’s Report
CHAIRMAN'S
31 CEO's Report REPORT
32 CFO's Report
37 Divisional Performance Indicators 46 Divisional Reviews
38 Report on Our People 60 Corporate Governance
46
44 Stories of Our People 68 Board Risk Committee Report DIVISIONAL
70 Audit and Compliance Committee Report REVIEWS
72 Internal Audit Report
74 Social, Ethics, Transformation and
Sustainability Committee Report
78 Social Report
80 Remuneration Report
93 Board of Directors
94 Shareholder Information
95 Declaration of Final Cash Dividend
96 Approval of the Annual Financial Statements
97 Report of the Independent Auditor
98 Report of the Directors
102 Abridged Financial Statements
108 Administration and Contact Details
38
OUR PEOPLE
109 Definitions and Glossary
110 Notice of Annual General Meeting
115 Form of Proxy
SHAREHOLDER
INFORMATION
94
80
REMUNERATION
REPORT
MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
2013 HIGHLIGHTS
07
Scope HIGHLIGHTS
WHERE WE’RE AT... and Boundary
19%
About the report
The Group is committed to integrating social, environmental and governance performance OPERATING PROFIT
with financial performance in accordance with the King Code of Governance for South
Africa, 2009 (King III). Issues that have a material impact on the Group have been
included. This year's report has been produced in a more concise manner, including only
abridged financial statements. Additional information is available on the Group's website
(www.mrpricegroup.com).
Scope and boundary
HEADLINE EARNINGS PER SHARE
26%
This Annual Integrated Report, for the 52 week period ended 30 March 2013, includes
the consolidated financial results of Mr Price Group Limited trading in South Africa and its
23.5%
African operations in Botswana, Namibia, Lesotho, Swaziland, Ghana and Nigeria as well
as the income received from its franchise operations trading elsewhere in Africa. Pages 12 27 YEAR CAGR IN HEPS
and 13 illustrate the geographical representation of retail operations.
The Group’s Strategic Planning Framework and the Global Reporting Initiative (GRI) served
as guidance to identify issues material to its long-term sustainability. Relevant disclosures
include those pertinent to corporate-owned operations but exclude franchise operations.
The Group’s social initiatives are focused on South African national priorities.
DIVIDENDS PER SHARE
27%
The Annual Financial Statements have been prepared on the historic cost and going
concern bases, and are prepared in accordance with the International Financial
Reporting Standards (IFRS) and in the manner required by the Companies Act of
South Africa (71 of 2008) and the JSE Listings Requirements. RETURN ON EQUITY
51.1%
Assurance
The Group’s consolidated Annual Financial Statements were audited by the
external auditor, Ernst & Young Inc. Their unqualified report can be found online
as part of the consolidated Annual Financial Statements.
The South African Broad-Based Black Economic Empowerment (B-BBEE)
CASH RESOURCES OF
R1.2 BILLION
accreditation level has been externally verified by a SANAS accredited
organisation, BEESCORE (Pty) Ltd.
The Board is satisfied with the level of integrated reporting, but recognises
that it is premature to subject the Annual Integrated Report to external
ASSOCIATES EMPLOYED
19 384
assurance at this point. The Group’s Internal Audit Division has verified the
selected disclosures contained in the Social, Ethics, Transformation and
Sustainability Committee Report (page 74) and the Report on our People 700 120
(page 38). The external auditors have verified the information in the Remuneration
Report (page 80). 600
100
Directors’ responsibility 500
The Board acknowledges its responsibility to ensure the integrity of the integrated report.
HEPS and DPS (cents)
80
Share price (rand)
The Board has applied its mind to the integrated report and confirms that it addresses 400
all material issues, and presents fairly the integrated performance of the Group and its 60
impacts. The integrated report has been prepared in line with best practice pursuant to the 300
recommendations of the King III Code (principle 9.1). The Board authorised the integrated
report for release on 22 May 2013. 40
200
100 20
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Headline earnings per share Dividends per share Share price
NG Payne SI Bird MM Blair
Chairman Chief Executive Officer Chief Financial Officer
MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
2013 UNDER REVIEW
09
MaintainedB-BBEE Level 6 Compliance.
Exceeded 1 000 corporate-owned stores.
R16.4 million paid Successful first year
in dividends to Mr Price Partners Share Scheme participants. performance of
stores in Ghana
and Nigeria
AWARDS
AND ACCOLADES
People Management
The Group has invested in smart software solutions (Ceridian Dayforce Human Capital
2012 - Mr Price Group 2012 - Mr Price Group 2012 - Mr Price Group
Management System, Cornerstone Learning Management System and VIP Payroll)
Ranked 2nd in Sunday Times Ranked 5th in Sunday Times Ranked top of the JSE for
enabling world class people support to the business as the Group continues to expand
locally and internationally. Top 100 Companies 2012 Top 100 Companies 2012 total shareholder returns
(5 year compound growth (10 year compound growth over 10 years by the Sunday
rate in share price 43.2%). rate in share price 44.2%). Times in May 2012.
Mr Price Online
Launched on the 30th July 2012, at a high profile event held at Mr Price Head Office
that included South Africa’s who’s-who in the fashion and media industry, www.mrp.com 2012 - Mr Price Group 2012 - Mr Price Group 2012 - Mr Price Group
has enjoyed an almost fairy tale experience to date. Constant and positive social media Included in MSCI Emerging Finalist of the World Retail Investment Analyst
feedback is testament to the fact that Mr Price has set the benchmark in online shopping in Markets Index from Awards 2012 in the Society Awards 2012
South Africa, so much so that it also became the most searched retail brand on Google in May 2012. Emerging Market Retailer of Mr Price Group was voted
South Africa for 2012, despite only launching 7 months into the year. the Year category. leader in corporate reporting in
the consumer services sector.
Facebook Likes Twitter Followers Site Visits Page Views
209 418 14 768 2 949 827 33 024 760 2012 - RedCap Foundation
The RedCap Foundation’s YoungHeroes programme received an Honorable
Mention in the Africa category at the IPN Global Best Awards. This award
recognises the programme’s achievements under the category of “partnerships
that support health, wellbeing and learning in Africa.”
MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
OUR BUSINESS
11
NUMBER OF
NUMBER OF STORES DETAILS ASSOCIATES PRODUCT OFFERING CUSTOMERS AND POSITIONING
APPAREL
384 10 398
Average store size Clothing, footwear, accessories, underwear Marketing is pitched at 16 to 24 year olds who want to
624m2 and maternitywear keep abreast of the latest international trends at exceptional
prices. LSM range 6 to 10.
53 1 224
Average store size Sporting apparel, equipment, footwear and Value-minded sporting families who enjoy performance,
891m2 accessories quality, comfort and fit, whether they are participants or
spectators. LSM range 6 to 10.
189 1 964
Average store size Classic and updated women’s clothing, Young-at-heart women aged 40+ years who have fashion
326m2 footwear, intimatewear, cosmetics and sensibility and require differentiated trends that offer style
accessories and co-ordination. LSM range 6 to 10.
HOME
Looking good...
150 3 335
Average store size Home textiles, homeware, furniture and Contemporary lifestyle customers, aged 18 and upwards,
920m2 kids’ merchandise all with a young-at-heart attitude. LSM range 6 to 10.
253 1 597
Average store size Bedroom, living room and bathroomware Middle-income consumers looking to co-ordinate their homes
195m2 tastefully but responsibly. LSM range 5 to 8.
FRANCHISE
26 7*
Average store size Clothing, footwear, accessories, underwear The franchise stores operate the same business model as
514m2 and maternitywear. Home textiles, homeware the corporate-owned stores.
and furniture
* Head office
associates only
FINANCIAL SERVICES
352
Credit and financial services Granting of credit, management and collection of Cards available are as follows:
available in all South African and debtors book and identification and marketing of • Mr Pricemoney (Mr Price Apparel, Mr Price Home,
Namibian stores financial services products Mr Price Sport)
• Miladys
• Sheet Street
CENTRAL SERVICES
507
Provides the following services to the trading divisions:
• Information technology,
• Internal audit,
• Human resources,
• Real estate,
• Financial,
• Risk and governance, and
• Sustainability
1 055 19 384
FOOTPRINT MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
OUR FOOTPRINT
13
GAUTENG LIMPOPO
5
Mr Price Apparel - 16
10
8
l-
-5
re
Mr Price Home - 8
pa
e
3
om
Ap
-2
H
rt
e
0
Mr Price Sport - 1
ric
o
e
-7
ric
Sp
rP
rP
et
43
e
M
re
ric
M
Sheet Street - 15
St
s-
rP
dy
et
M
384
e
ila
Sh
Miladys - 10
M
150
FREE STATE MPUMALANGA
53
NORTH WEST 32 - Mr Price Apparel
Mr Price Apparel - 18 253
Mr Price Home - 7 50
STORES
8 - Mr Price Home
1 - Mr Price Sport 189
Mr Price Apparel - 27 Mr Price Sport - 3
Mr Price Home - 7 23 - Sheet Street
Sheet Street - 13
1029
Mr Price Sport - 2 18 - Miladys
Miladys - 17
Sheet Street - 16
CORPORATE
STORES IN AFRICA
Miladys - 14
299
STORES
82
STORES
Mr Price Apparel
Mr Price Home
NORTHERN CAPE 66
STORES
Mr Price Sport BOTSWANA
Sheet Street
9
Miladys
17
13 - Mr Price Apparel 3
3
STORES
4 - Mr Price Home 2
56 - Mr Price Apparel
SWAZILAND
1 - Mr Price Sport
17 - Mr Price Home
UR
7 - Sheet Street 2
8 - Mr Price Sport
6
2
6 - Miladys 2
31 58 35 - Sheet Street STORES
STORES STORES
38 - Miladys NAMIBIA
154
STORES
14
27
3
1
STORES
5
LESOTHO 4
2
4
1
1
149 83
STORES
KWAZULU-NATAL
STORES STORES NIGERIA
2
2
STORES
54
GHANA
l-
4
re
-2
pa
Ap
e
10
1
om
e
t-
H
EASTERN CAPE 1
ric
39
or
e
rP
WESTERN CAPE
ric
Sp
-
M
rP
et
22
e
STORE
tre
ric
M
s-
tS
rP
Miladys - 13
Mr Price Apparel - 33
Mr Price Home - 10
Mr Price Sport - 3
Sheet Street - 24
dy
ee
FRANCHISE
M
ila
Sh
M
19
26
STORES
7
MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
BUSINESS OVERVIEW
15
OVER THE PAST 27 YEARS,
THE GROUP HAS DELIVERED STRONG
GROWTH IN EARNINGS, DIVIDENDS
600
AND SHARE PRICE
120
PASSION
Ordinary people doing extraordinary
500 100
things. Passion is our engine. It is the positive
HEPS and DPS (cents)
Share price (rand)
attitude and enthusiasm of all our associates
400 80
who approach each day bright-eyed, smiling
and projecting a positive image – believing
300 60
work is fun.
200 40
VALUE
100 20
1986
1987
1988
1989
1990
1991
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1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
The heart of our business. The success of
our business has been, and will continue
HEPS DPS Share Price
to be, built on our ability to add value to
27 year compound annual growth rate - HEPS: 23.5% DPS 25.3% our customers’ lives. But it is more than just
price. It's about quality, fashionability, being
in stock of the wanted item and delighting
OUR DREAM our customers by doing more than what is
To become a top performing international retailer.
expected.
OUR PURPOSE
To add value to our customers’ lives and worth to our partners’ lives,
whilst caring for the communities and the environments in which we operate. PARTNERSHIP
Sharing the ownership and success of the
OUR VALUES Company with all our associates and
WE ARE A HIGH GROWTH fostering solid and long-term partnerships
PASSION - VALUE - PARTNERSHIP with our suppliers. Without our customers,
SOUTH AFRICAN-BASED The Group retails apparel, homeware and sportswear
in 2 business segments of ‘Apparel’ and ‘Home’. These are the 3 key values upon which the Group has been built. They are the we don’t have a business and they are one
‘Apparel’ includes the Mr Price, Mr Price Sport and foundation stones of the business and never change. By staying true to PASSION, of our most valued partners. We partner with
FASHION-VALUE RETAILER, SELLING Miladys brands and ‘Home’ includes the Mr Price Home VALUE and PARTNERSHIP we ensure that we are building a sustainable business as our community by investing in strategic
and Sheet Street brands. we progress towards our vision of being a top performing international retailer and initiatives that improve the lives of those who
PREDOMINANTLY FOR CASH. WITH A fulfilling the dream for our partners – our Mr Price family. are less fortunate, particularly children and
The Group launched its online sales platform in July youth.
MARKET CAPITALISATION OF 2012 and also offers financial services to its customers.
R29.4 BILLION AT YEAR END, The Group operates 1 029 corporate-owned stores in GOVERNANCE
South Africa, Botswana, Namibia, Swaziland and Good governance and ethical and effective leadership are considered critical to the
THE GROUP RANKED 46TH Lesotho with recent corporate store expansion into West Group’s success and sustainability. The Group is therefore committed to “Governance
Africa, namely Nigeria and Ghana. The Group has 26 beyond Compliance” and to the adoption, integration and embedding of the spirit and
ON THE JSE. franchise operations trading elsewhere in Africa principles of governance as opposed to simply responding to and complying with rule sets
namely Kenya, Malawi, Mauritius, Mozambique, and recommended codes. The Group considers good governance to be a natural extension
Rwanda, Tanzania, Uganda and Zambia. More of its values and has structured and organised itself in order to give effect to its commitment
information on these international operations can be to robust governance. More information on the Group’s governance strategy and activities
found in the International Review on page 56. during the period can be found in the Corporate Governance Review on page 60.
VALUE IS AT THE VERY CORE OF THE
MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
BUSINESS OVERVIEW
17
GROUP’S EXISTENCE……
OUR FASHION - QUALITY - PRICE
Being a value retailer means lower mark-ups in order to offer ‘everyday low
OUR JOURNEY
The Group has consistently delivered exceptional growth, however it still views itself as a growing company with great prospects. Over the
MODEL
prices’. This results in large order quantities and higher sales volumes that keep last few years the Group has been heavily focused on driving operational performance and specifically, improving the operating margins
VALUE
input prices low. of underperforming divisions. Although considerable success has been achieved to date, further margin improvements are expected in the
Maintaining a low overhead structure is imperative to delivering acceptable future. The Group has moved into the investment and growth phases of the journey. This will support its dream and includes expansion into
operating margins. The Company seeks to balance this with incurring costs new trading formats such as online and new markets beyond South African borders.
often ahead of revenue generation which will support future growth.
The Group's long-term thinking requires it to invest substantially in information
technology and supply chain. This underpins the growth strategy in order to 2010 2011 2012 2013 2014 2015 2016 2017
preserve the proud track record of earnings growth.
BUSINESS IN ‘FIX UP’ MODE
INVEST IN SYSTEMS, LOGISTICS, SUPPLIERS
GROWTH PHASE
FIX INVEST GROW
OBJECTIVES
• Address areas of weakness and • Have a suitable infrastructure in place. • To be an internationally competitive
opportunity, particularly in the A powerful engine which is revving retailer, with robust topline growth and
underperforming divisions and ready to go foreign revenue increasing at a higher
rate than locally
• Capture market share, improve trading • Enhanced processes, systems and
densities and increase operating infrastructure to support the next phase • Extend track record of HEPS growth
margin % of growth of CAGR greater than 20%
OUR BUSINESS THE GROUP IS FOCUSED
MODEL ON REMAINING A PROGRESS
FASHION
IS SYNONYMOUS CASH-DRIVEN RETAILER.
CASH
Since 2010: • Group has committed to R2.5 billion • Research and testing of new markets is
WITH OFFERING THE AIM IS TO MAINTAIN • Trading densities have increased from capital expenditure over the next 5 currently underway
FASHIONABLE A CASH SALE
R18 492m-2 to R24 979m-2 years, including R1 billion for a new
ERP system and distribution centre
MERCHANDISE AT CONTRIBUTION OF AT • Operating margin has increased from
10.5% to 15.6%
EVERYDAY LOW LEAST 75%. THIS YEAR
PRICES. CASH SALES WERE 80.4%
THIS IS HOW WE SATISFY OUR CUSTOMERS’ NEEDS
(81.4%) OF TOTAL SALES. The Group has adopted an integrated approach to strategy, risk management, performance and sustainability. It is committed to the
THIS LEVEL OF CASH SALES ENSURES THAT THE alignment of “profit, people and planet” as it pursues its vision to become a top performing international retailer.
FOR FASHION:
GROUP IS:
• Fashion research, specialist trend teams and frequent The following focus areas which are detailed on pages 18 to 24 are relevant to the Group's ability to create and sustain value in the
international travel • Less impacted by the cyclical nature of retail
longer term, and thereby achieve its vision:
• Active dialogues through digital and social media • Less exposed to bad debt (as it does not have the
challenge of collecting a large debtors’ book) 1. Sustainable growth in targeted markets
• Responding to customers’ changing fashion needs
• Thorough product testing before making large • Not dependent on releasing more credit into the 2. Building people capacity
merchandise commitments market to drive turnover, particularly during poor
economic times 3. Focus on the value model
• Slow selling merchandise is marked down and sold to
make way for new fresh merchandise. Product is not • Able to fund future growth without gearing. Strong 4. Business systems, supply chain and resourcing capability enhancements
accumulated for an ‘end of season’ sale, so there are cash flows will support increased capital
everyday low prices expenditure and maintain an appropriate dividend 5. Sustainable local development
pay-out ratio
1. SUSTAINABLE GROWTH IN TARGETED MARKETS
South African consumers moving up the LSM curve (the rising sector growth and job creation. This will in turn lead to an increase
MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
BUSINESS OVERVIEW
19
middle class) have directly benefited the Group’s topline growth, in consumer spending which is expected to grow from US$860
profitability and total shareholder returns. These increases are billion (2011) to US$1.4 trillion by 2020. Other factors such as a
expected to continue, mainly in the LSM 4 -10 categories, which faster population growth rate of 875 million (2011) growing to WHERE WE ARE GOING
includes the Group’s direct target market, LSM 6 -10. 1.2 billion (2025), urbanisation increasing from 36% (2011) to
an estimated 50% (2030) and the rapidly expanding new middle • Grow market share in established markets. South
A key consideration in focusing on international growth is to class (growing by over 3.1% per year), will as a result of improved
decrease dependence on one specific market and develop a more living standards, increasingly need apparel, homeware and
African “home base” is still key to the Group’s
diversified business. sportswear. Africa will be the new retail growth story within the future and holds exciting growth prospects. It is the
next decade. (Source: Global McKinsey Institute, World Bank, foundation which will fund infrastructure and
The trends which have driven economic development in other African Development Bank)
expansion;
emerging economies are beginning to take hold in Africa.
Sub-Saharan Africa (SSA), driven by commodity availability, The growth of the internet has also presented retailers with the
a youthful workforce, recent discoveries of oil and gas on the opportunity to enter new markets without the need to commit to • Open further stores in West Africa (Nigeria and Ghana),
eastern seaboard and the continued supply of agricultural products building a large and expensive network of stores. The Group’s and research specific African countries for direct
to international markets is expected to grow at a faster rate than research is focused on the right business model to enter new
the western world. Foreign direct investment into Africa will territories with either online or a mixture of online and bricks and
investment opportunities;
continue to grow exponentially. This will lead to further private mortar stores.
• Research other international markets to identify
KEY IMPERATIVE RESPONSE additional growth opportunities;
MAXIMISE LOCAL OPPORTUNITIES:
• Launch Mr Price Apparel online
STORE LOOK
New generation store design to be rolled out. The new generation store design is currently being rolled out and has been internationally, with specific focus on
positively received by customers. Australia, New Zealand and the UK in the
The number of new generation stores that have been opened during the year is first half of the new financial year;
as follows:
Mr Price Apparel 23
Mr Price International 1 • Launch Mr Price Home, Sheet Street and
Mr Price Sport 9
Miladys 12 Mr Price Sport online in South Africa within
Mr Price Home 17 the next year; and
Sheet Street 42
TRADING SPACE
In recent years, the focus has been on improving divisional This process is well underway and the Group now has a greater appetite to take • Enhance the level of marketing, product
performance by driving up trading densities. on new attractive trading space – the right sized store with the right rental
structure.
testing and linking with customers via
• Target gross new space of 5% per annum; social media.
Gross new trading space was increased by 3.8% (closing) and 3.6% (weighted
average) during the current year. However, prior to planned space reductions
• Reduce space in oversized stores, (Mr Price Sport and and store closures, new space opened amounted to growth of 6.2% (closing
Mr Price Home had many overspaced stores); and space).
OUR CHALLENGES AND OPPORTUNITIES OUR RESPONSE
Mr Price Sport reduced its store space by 3 095m² and Mr Price Home reduced
• Expand stores where trading densities are too high. by 4 158m², the latter remaining a continuing opportunity over the next 5 years.
Focused 'research and test' strategy for international markets.
This has had a positive impact on store performance, with Mr Price Sport Assessing the emerging market opportunity, including Africa.
reducing space in 4 stores by 42% but increasing sales by 8% and profit by 69% Strengthen management teams in key growth areas.
(Mr Price Apparel’s trading density of R31 466m² is high by
industry standards, especially for a value retailer. Up to a 3rd and Mr Price Home reducing space in 4 stores by 29% but increasing profit by
of its stores are considered too small, which negatively impacts 26%. Availability and cost of retail infrastructure and space. Engaging with
Multi-channel approach to expansion, which integrates traditional
shopper experience and results in lost sales opportunities). the new generation consumer, who is becoming increasingly “switched
stores, E-commerce and mobile. Stringent store feasibility process.
This year, Mr Price Apparel expanded by 2 781m², evidencing that this will still on” and demands convenience in their shopping.
be an opportunity area for many years to come.
Maintain focus on target customers and continue to increase market
TEST NEW CHANNELS The Mr Price Apparel online site, www.mrp.com, was successfully launched in Increased urbanisation and rising middle class.
share.
South Africa in July 2012. The objective was clear – make online shopping as
convenient for the customer as possible. To this end, the online offer was made Increased globalisation, including increased entry of international Continue to focus on the fashion-value business model, and increased
available both on the web and on mobile devices. Multiple delivery methods and
retailers into South Africa. product design and test strategy.
6 payment options were offered.
The Group’s strategy in terms of building supply chain, systems and
INTERNATIONAL RESEARCH ON OWNED STORES IN The corporate ownership model and structure for international operations was Infrastructure, systems and people capacity and maturity.
AFRICA established. Test stores were opened in Nigeria and Ghana, which have traded people are well established and clear.
very well.
South African social and economic landscapes. Sales growth strategy will lessen dependence on one country.2. BUILDING PEOPLE CAPACITY
The Group recognises that skilled and committed people, who have
MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
BUSINESS OVERVIEW
21
high passion for their work, drive a successful business. The ability of
leadership to respond to opportunities and threats, to build strong team
structures supporting future expansion, and to effectively rollout the new 3. FOCUS ON THE VALUE MODEL
Human Capital Management (HCM) system is key to achieving goals.
VALUE is a foundation stone of the business model and this will never change. By staying true to this the Group ensures
With ongoing expansion and business systems improvements, that it is building a lean, sustainable business in a more constrained world. Adding value to our customers’ lives is our purpose and this is
management of change is an essential competency to ensure that achieved through an ongoing focus on improved efficiencies.
company values and corporate ‘DNA’ are retained. Effective
communication will be vital to ensure that associates understand and
are energised by the various opportunities, in both work and careers. KEY IMPERATIVE RESPONSE
KEY IMPERATIVE RESPONSE Continue to improve operational performance by Although the Group’s operating margin has shown strong growth, it was impacted by
maintaining low overhead structures and improving the performance of certain divisions.
GROW THE HUMAN CAPITAL RESOURCE, operating margins.
PRIMARILY:
The initial operating margin targets were: The initial targets were achieved with the exception of Mr Price Sport, and revised
medium-term targets are:
• Emerging leadership and key skills development. • Identified areas that required strengthening and implemented various Mr Price Sport 10% >15%
initiatives such as new e-learning modules, internship programmes, and Mr Price Home 10% >15%
emerging leader development. Sheet Street 10% >15%
Miladys 15% >20%
• Improved skills sourcing and attraction.
There are still opportunities to further improve the operating margin of
• Built a robust succession plan, which is constantly updated as people Mr Price Apparel, however the magnitude of the improvement is not at the same scale
development takes place. as the other divisions.
• Identified appropriate structures for the key teams impacted by the Group’s Identify cost savings to offset the financial impact of the A number of cost saving initiatives were identified and are currently being progressed,
expansion plans. increased investment in business systems and supply including:
chain. • Enhanced tender process;
• Focused development of previously-disadvantaged • Energy initiatives to reduce cost and consumption;
associates for middle and senior management • Actively managed and monitored Employment Equity goals. • Review of sport sponsorships;
succession, which will feed the 'pipeline' into top • Rollout of the Ceridian Dayforce Labour Scheduling System, which was implemented
management. in 114 stores (aims to better align associate working hours with peak trading
periods and thereby improve the customer experience and turnover whilst reducing
overtime); and
Research and implement new Human Capital Selected an appropriate HCM system and started implementation of the labour • Focus on rental negotiations and a more stringent new store feasibility process.
Management (HCM) system. scheduling and payroll components. Conducted workplace training and change
management to enable business outcomes.
Keep input prices low. Refer to point 4 on page 22.
WHERE WE ARE GOING
• Focus on leadership development, including Employment Equity;
WHERE WE ARE GOING
• Build and train new skills required to support the Group’s future growth;
• Monitor and manage changes to processes and roles as a result of business systems improvements; and There will be continued emphasis on operating performance to achieve the desired level of margins, despite the Group’s strategic focus
• Continue to rollout the HCM system, labour scheduling module to all stores in the next financial year and implement the learning moving to the investment and growth phases. Although these investments are expected to result in higher short-term costs, they represent
management module. significant opportunities to further improve efficiencies, costs optimisation and topline growth over the longer term.
OUR CHALLENGES AND OPPORTUNITIES OUR RESPONSE
OUR CHALLENGES AND OPPORTUNITIES OUR RESPONSE
Attraction and retention of key skills. Continued focus on embedding the Group’s values and DNA in order
to position the Group as a preferred employer. Continuation of share Significant investment in building future capabilities. Investment in a new Enterprise Resource Planning (ERP) system and
schemes, in which all associates can partake, is a strong incentive and distribution centre.
retention mechanism.
Resourcing model, availability and cost of local manufacturing Continuing to build a robust supply base that focuses on maintaining
Leadership development and succession, including senior and Focus on building future leaders and strong pools of talent to feed the capabilities. and developing local suppliers and entering into strategic partnerships.
merchant leadership. succession pipeline.
Support Centre infrastructure and costs. Continued focus on maintaining a low cost structure and tendering
Associate engagement and empowerment. Process re-engineering to improve efficiencies, release capacity and process for larger input costs.
enhance the work environment.
Availability and cost of retail space. Developing a multi-channel approach to retailing, which includes
Transformation. Continued focus on transforming and empowering the workforce. growth in traditional retail space, E-commerce and mobile.
The medium to long-term plan is to train and develop middle
management levels, rather than to 'buy in' at top levels. Labour efficiency. Implementation of the Ceridian Dayforce Labour Scheduling System.4. BUSINESS SYSTEMS, SUPPLY CHAIN AND
RESOURCING CAPABILITY ENHANCEMENTS
MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
BUSINESS OVERVIEW
23
WHERE WE ARE GOING
The Group’s future growth and profitability strategies are
dependent on an agile and low cost end-to-end supply chain. The Group plans to implement a new
Visibility of product throughout the supply chain is crucial in
order to create an effective network that responds to changes in Enterprise Resource Planning (ERP) system
demand and supply thereby ensuring optimal product
availability at acceptable cost. and construct a new and enlarged distribution
The major IT projects support the business growth strategy, the centre (DC) facility over the next 3 years,
key drivers being: a more flexible and agile supply chain to
reduce costs, getting merchandise to market timeously and which will require a significant capital
enabling the ability to trade internationally. This enables the
Group to trade competitively whilst complying with all local and investment of almost R1 billion.
cross border regulations.
The underlying technical architecture to support all these new,
more complex and distributed applications needs to be The implementation of the 1st ‘test division’
upgraded.
for the new ERP system is scheduled for May 2014,
with the remainder of the Group’s divisions
KEY IMPERATIVE RESPONSE
following thereafter. The new distribution facility is
Continue to enhance supply chain efficiency, capacity
and responsiveness to enable the Group’s expansion
• The size of the new single facility distribution centre has been determined and the
location identified. The land has been acquired, subject to the necessary scheduled to be operational in August 2015
plans and reduce the impact of rising fuel prices. approvals, which are in progress. Building design and material handling
equipment installation planning has commenced.
and the project contains several key milestones
• International consolidation centres operated by 3rd parties are being used. The
consolidation of merchandise at source with shipment directly to point of customer
demand is key to reducing cost and lead times. The elimination of the current
over this period.
double duty scenario whereby import duty is incurred into South Africa and then
again in foreign markets is key to reducing selling prices in those territories.
• A new 5 year contract, effective 1 April 2013, has been signed with the Group’s
outbound store carriage service provider. OUR CHALLENGES AND OPPORTUNITIES OUR RESPONSE
Ability to develop a more balanced and sustainable resourcing model. Continue to develop and partner with our suppliers to build a supply
Information technology and business systems innovation • A project to define business information needs and business processes was
to support business growth and achieve increased chain that provides continuity of supply at best cost whilst being flexible
initiated. The outcome was an improved business process model for all aspects of
capabilities and efficiencies. merchandise, taking global supply chain and global trading into account. to changing customer demands.
• A strategic IT capability assessment was conducted. The key outcome was the IT alignment and capability to support the Group strategy and vision. Continued focus on IT governance, business alignment and strategic IT
need for a new ERP backbone and merchandise planning and allocation system, roadmap.
both of which will enable efficient processes to be adopted, and global
requirements to be met. The application solutions and implementation partners Change impact of migrating to a new ERP system and introducing new Deployed a focused team and partnered with specialists. Robust due
have been selected with the project starting in the new financial year. business processes. diligence, project governance and change management processes
were undertaken to minimise business disruption. A phased
implementation plan is being adopted, with the new system being
Product sourcing and enhanced level of engagement The Group is reviewing its resourcing strategy, including building strategic
with key suppliers. relationships with key suppliers, to improve on time and in full order delivery rates, tested in a smaller division (Mr Price Sport) before being rolled out to
reduce lead times and enhance visibility and flexibility. the remaining areas of the business.
DC capacity and change impact on our people of relocating the DC to The new DC project has been set up as a major project, with a focused
a new location. team and partnership with specialists. This includes sound due
diligence, project governance and change management processes.
Skills and proficiency, including leadership, to support planned Continued focus on skills development and/or skills acquisition,
changes. including through partnership with specialists.5. SUSTAINABLE LOCAL DEVELOPMENT
The Group is identifying opportunities to implement strategic initiatives to develop
MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
BUSINESS OVERVIEW
25
the capacity of local suppliers. By building capacity in South Africa, the Group
supports the local economy and enables flexibility in the supply chain. Key indicators have been identified to measure the
Group’s economic, social and environmental progress.
Social investment is made through the Group’s donation to RedCap Foundation and
RedCap Sport, which continue to implement innovative solutions to address
challenges in the South African education system in partnership with the National
Department of Basic Education.
The Group has recently joined forces with the JobsFund and other organisations to promote job creation in South Africa. This is being
achieved through the Group’s Enterprise Development Strategy and the efforts of RedCap Foundation to support strategic skills development
through the JumpStart Programme. Refer to the Social Report on page 78 for further details.
KEY IMPERATIVE RESPONSE
ECONOMIC Unit 2013 2012 2011 2010
Continue to invest in the community. • RedCap Foundation’s JumpStart Project was awarded its 1st tranche of the JobsFund’s R17.5
million grant to upscale the programme. 745 young people were placed into jobs over a 6 Retail sales R’m 13 266 11 767 10 673 9 454
month period.
Headline earnings per share cents 635.5 503.0 418.9 276.9
• The RedCap Centres of Excellence introduced the YoungHeroes Programme (focused on physical Operating margin % 15.6 14.8 13.4 10.5
education and school sport) to 6 provinces in 2012.
Dividends per share cents 398.0 314.0 252.0 173.0
• The various initiatives of the RedCap Schools Project produced an improvement in learner results Share price (closing) Rand 116.99 94.34 63.38 39.80
of 10% - 13% and teacher content knowledge by 15% - 17%.
Return on net worth % 46.4 43.8 42.2 32.5
• The High School Soccer Programme was implemented in 6 provinces. Cash sales as a % of total sales % 80.4 81.4 83.8 83.9
Build a sustainable local supply base. A loan was made to a local shoe manufacturer to assist them to grow their business output and SOCIAL
become a strategic supplier. The impact will be:
• Growth in jobs; and Total number of people employed 19 384 17 894 17 887 17 300
• Skills development in the footwear manufacturing industry. Staff turnover % 21.5 22.6 22.1 25.7
Black staff as a % of total permanent staff % 94 91 89 90
Support sustainable B-BBEE. The Group maintained B-BBEE Level 6 Compliance due to its on-going investment in skills development,
Promotions of black people as a % of total promotions % 87.1 85.2 78.2 82.7
enterprise development, socio-economic development and local procurement.
Investment in people learning and development R’m 30.8 25.1* 9.9 7.0
Black people participating in learning and development % 88 87 83 78
WHERE WE ARE GOING B-BBEE rating Level 6 6 6 Not measured
• Continue to invest in RedCap Foundation and RedCap • Identify further Enterprise Development opportunities to Corporate Social Investment R’m 16.7 13.0 11.4 7.4
Sport Programmes; support capacity building and skills needs of local suppliers
to the Group; and Enterprise Development Investment R’m 23.2 21.4 1.5 Not measured
• Develop the skills of unemployed youth to support the local
footwear and clothing manufacturing sector; • Continue to support sustainable B-BBEE taking into
consideration the amendments to the BEE Codes of Good ENVIRONMENTAL
Practice.
Carbon emissions (estimated) CO2e tonnes 210 786
OUR CHALLENGES AND OPPORTUNITIES OUR RESPONSE
*2012 onwards, includes capital expenditure as per BEE recognition criteria.
Poor education levels and a lack of skills hamper business growth. RedCap Foundation’s JumpStart Project, with regular monitoring and
NOTE: The accuracy of the Group’s carbon footprint has been enhanced in 2013 as the data is more complete. It is expected that this
evaluation of programme impact.
will be further enhanced in 2014 as meters are being installed in stores to accurately record electricity consumption. Refer to the energy
Lack of physical education and sport offered in schools. RedCap Sport initiatives with regular monitoring and evaluation of and carbon footprint section of the Social, Ethics, Transformation and Sustainability Committee Report on page 74 for
programme impact. more details.
Lack of competitiveness and skills in the South African manufacturing Investment and participation in a local retail manufacturing skills
OTHER INDICATORS: Additional indicators of the Group’s performance can be found under “Divisional Performance Indicators” on page
industry. training facility and Enterprise Development initiatives.
37, and under “The 6 Year Review” which can be found on the Group’s website.
Change impact of impending revised Codes of Good Practice. Respond, where possible, to the new Codes of Good Practice and
re-align initiatives to ensure compliance.MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
STAKEHOLDER ENGAGEMENT
27
KEY STAKEHOLDERS HOW WE ENGAGE WHAT WE ENGAGE ON ISSUES RAISED RESPONSES AND OUTCOMES
The Group recognises the importance of stakeholder AND WHY THEY ARE DURING THE YEAR
engagement to ensure the long-term sustainability of IMPORTANT TO US
the business. This process ensures greater transparency, SHAREHOLDERS AND Annual General Meetings Company performance Clarification around The issues requiring clarification have been
as key stakeholder issues are identified and addressed. THE INVESTMENT certain issues related to the detailed in the Remuneration Report on page 80
COMMUNITY Meetings throughout Retail sector trends and remuneration of Directors
the year with local and issues
STAKEHOLDER
To provide details international analysts and Growth in unsecured credit The Group's strategy is to remain a cash based
regarding company investors Dividend policy and the impact on retailer and in recent times has restricted its credit
preformance and the consumers and the growth – refer to the CFO’s Report on page 32
business strategy Results announcements Share price performance Company for details
and presentations to the
Investment Analysts Society Future prospects Concern regarding the Companies in South Africa have, over the years,
in Johannesburg and Cape social and economic developed mechanisms and strategies to cope
Town and roadshows to Strategy situation in South Africa with doing business in an environment such as
the UK and USA ours and the resultant volatile currency. While this
is not ideal, the country has coped with far worse
ENGAGEMENT
SENS announcements situations. The Group has managed to achieve a
compound rate of HEPS growth over the last 27
Trading updates years of 23.5%, and has performed well during
periods of Rand weakness and poor economic
Group website conditions
Annual Integrated Report The Group’s strategy is to grow both locally and
internationally, and to reduce dependence on 1
market
CUSTOMERS Traditional, digital and Brand perception and Range, availability and Continuously offer core and fashion products,
social media expectations quality of products improve availability of wanted merchandise
The Group defines stakeholders as those individuals, To understand our
groups of individuals or organisations who affect customers’ needs, E-commerce Fashion trends Customer service Continued focus on quality through enhanced
increase market share and quality assurance processes
and/ or could be affected by the Group’s activities, enhance the brand Customer and market Customer service Credit facilities
products, services and performance. Each key surveys Continued focus on associate service levels
Customer safety Customer interest in and
DEFINITION OF
stakeholder group has a business owner who is the Customer service hotline interaction with the Group Responsible credit facilities are available to
Community support and via social media qualifying customers
individual in the Group primarily accountable for Advertising campaigns and fundraising through the
managing the relationship with the particular competitions RedCap Foundation and Launch of www.mrp.com in July 2012
ASSOCIATE AND PARTNER: stakeholder or stakeholder group. Store associates' interaction
with customers
RedCap Sport
The table on page 27 provides information on the ASSOCIATES AND Induction programme People development and Pay and employee benefits Letters distributed to all associates detailing total
MUTUAL RESPECT IS
PARTNERS training cost to company, including updated share option
Group’s key stakeholders. Although we have not listed (our people) Team meetings information
the communities in which we operate and certain Health and safety Training and development
BASIC TO THE ETHOS OF
To enhance associates’ Training needs analyses performance opportunities Increased use of technology to address issue of
government departments with whom we have a sense of value and time to train e.g. e-learning, social learning etc.
commitment and to align Results presentations Wellness programmes
relationship in this table, it is important to note that the associates to the Group New learning management system being
MR PRICE GROUP. Group acts in a responsible and compliant manner
towards these stakeholders.
strategy Performance reviews Remuneration, benefits and
incentives
implemented to give associates greater access to
learning and developmental opportunities
Career planning
WE THEREFORE REFER TO Social media has become critical to successful
Internal media – Red Cap
radio and TV
Transformation and
employment equity
Divisional learning development plans aligned to
business strategies
OUR CO-WORKERS AS engagement in the retail environment. Real-time mass
communication can be leveraged as an advantage, for
Fireside chats
Financial performance
Business Code of Conduct
Divisional and Group succession plans developed
Equity goals and plans set
“ASSOCIATES” AND, ONCE
Culture survey
example to gauge consumer opinion on an issue or Culture survey results Career plan development
merchandise, but it can also have the opposite impact Whistleblowers’ hotline
THEY OWN SHARES OR
Vision, dreams and beliefs Refer to the Report on our People on page 38 for
in the event of an unpleasant experience. The Group Awards events detailed engagement activities
recognises this importance, in particular the link
SHARE OPTIONS, THEY between new technologies and the age profile of
its target market. The international trend is for an
SUPPLIERS Supplier meetings and
negotiations
Monitoring and evaluating
performance
Non-deliveries Investment in supplier performance management
systems
To provide performance Supplier performance and
ARE GENERALLY integrated omni-channel approach to communicating
with customers, presenting a consistent look, feel,
feedback and information
regarding the future
direction of the Group
Strategic partnerships
Quality audits
Order quantities and
product cost and quality
development
Product cost and quality
Partnership agreements and service level
agreements
REFERRED TO AS and experience. Several new and exciting initiatives Supplier days
Future growth and
expectations of the Group Investment in local supply
chain
Increased strategic supplier meetings
Enterprise development and socio-economic
are underway, including the recent launch of
“PARTNERS”.
Distribution Centre (DC) Real estate requirements investment initiatives
www.mrp.com. tours and rentals B-BBEE compliance
Enterprise development
and socio-economic
development opportunities
DC delivery requirementsMR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
CHAIRMAN'S REPORT
29
CHAIRMAN’S
REPORT NIGEL PAYNE
O
n behalf of the Board, I am privileged to report to our
shareholders, people, customers, suppliers and all other
stakeholders. We believe that the best way to align all
interests is by relentlessly pursuing our long-term vision,
whilst daily living out the dreams and beliefs that have sustained our
compound growth in headline earnings per share over more than a
quarter of a century. As I indicated in my 2012 report, the Board has approved a number
of significant capital investments in support of the Group’s 5 year
Our purpose is to add value to our customers’ lives and worth to our business plans and budgets, specifically in supply chain and logistics
partners’ lives. Our dream or vision is to become a top performing in support of internationalisation and the expansion of our channels to
international retailer. Our customers continue to be delighted by our market. Greater detail on these initiatives can be found in the CEO’s
fashion-value offering, as reflected in our results to March 2013, Report on page 31.
thereby enabling us to continue to build momentum towards realising
our dream. We value the ongoing support of our ever-increasing Once again, the Board robustly assessed itself, the Board Committees
customer base and recognise that we only win when our customers and the contribution of each Director. Whilst the overall assessment
win. was positive, areas for improvement were identified and are being
addressed. Thank you to Lead Independent Director, Bobby Johnston,
The values and ‘golden rules’ in support of our dream are clearly for his tireless efforts in this regard. Significant additional information
VALUE
defined and widely communicated throughout the Group. These are in relation to our corporate governance is presented in the integrated
the foundations upon which our success has been built, and can report and on our website.
only be changed after diligent challenge and debate by the Board.
This forms the basis of our 'DNA', which harnesses the talents of our A new Memorandum of Incorporation, aligned to the revised South
people and enables them to do extraordinary things. African Companies Act, was approved by more than 80% of votes
cast at the 2012 Annual General Meeting. The Board has noted that
ADD VALUE TO OUR CUSTOMERS’ LIVES The Board strives to strike an appropriate balance between
governance and entrepreneurship. This is facilitated by a management
some shareholders, particularly those based in the United States of
America, voted against the provision for the non-rotation of executive
team that is transparent and a strong focus on eliminating under- Directors, which is in line with South African corporate governance
performance. The Board continues to work closely with executive guidelines. The Board devotes significant attention to the selection,
management in refining strategy. We focus on those risks that are the retention, performance and reward of our executives, and I encourage
most crucial to our future and we have a risk appetite that facilitates
WORTH
shareholders who have comments in this regard to address them to
entrepreneurship in pursuit of our dream. However, we are cautious me via the Company Secretary.
in the implementation thereof, taking time to test, evaluate, modify
where necessary and retest before committing significant capital to
implementation. I encourage stakeholders to familiarise
themselves with our educational and
ADD WORTH TO OUR PARTNERS’ LIVES Our Board Committee structures ensure rigorous debate around,
and control over, major issues of strategy and risk, whilst allowing other corporate social investment
management the flexibility to act quickly in a dynamic retail
environment. Having the founders of the Mr Price Group, Laurie
initiatives, as detailed in the Social
Chiappini and Stewart Cohen, involved in these processes continues Report on page 78.
to add considerable value.
We have an unwavering commitment to honest business practices.
The global and South African economies remain under pressure. Our daily practices, as well as our contracts with our business
However, opportunities exist in Africa and other emerging markets, partners, make it very clear that we do not pay bribes, overtly or
where our offering is particularly well suited. Whilst we anticipate covertly, nor do we tolerate third parties doing so on our behalf. Any
that the next few years will be challenging, our strong balance sheet, business partner who suspects otherwise is welcome to contact either
business model, cash flows and talent pool will enable us to continue the CEO or myself in confidence.
to invest for the future.
Professor Larry Ring retired from the Board at the end of March, after
Our very pleasing operational and financial performance reported 15 years of valuable service. In addition to his input on international
on by the CEO, Stuart Bird, and CFO, Mark Blair, reflect the efforts of retailing trends, the Babson principles he taught to our management
over 19 000 people, a large portion of whom are shareholders in teams over the years, and which he will continue to teach, have been
the Company. Our ‘growth through shared value’ approach serves us a contributing factor in the Group’s success. The Board records its
particularly well in tougher economic times, as our people recognise sincere appreciation for the contribution he has made to our Group.
that it is our customers who pay their salaries. The Board believes that
the Group’s remuneration structures, as detailed in the Remuneration The Board, management and all associates will continue to focus on
Report on page 80, remain appropriate, and that they have been adding value to our customers’ lives as we build for the future and
fairly applied during the past year. strive towards our vision.MR PRICE GROUP LIMITED
ANNUAL INTEGRATED REPORT 2013:
CEO'S REPORT
31
CEO'S
REPORT STUART BIRD
O ur ambition is to be a top performing international retailer
as measured against our global peers. By achieving this,
we will not only grow in our existing markets, which
have now attracted many new international retailers, but also in
Investing for the future
We are investing heavily for the future, not just in new stores and our
the markets we enter in the future. While the local and global retail online business, but also in our systems and supply chain capabilities.
environments continued to bring many challenges, Mr Price Group While our in-house legacy core systems have served us well, we
yet again grew sales and profit, delivering a solid performance in a realised that to achieve our future ambitions we would need to
difficult environment. consider acquiring an IT solution that would enable all our future
plans. We have completed the research, specification and vendor
Our formula of great fashion and quality at excellent prices has stood evaluation and selection phases and are now entering the design
us in good stead over the years and will continue to be what drives us and implementation phases. The project is expected to be completed
as we grow in our existing markets and enter new frontiers. Relentless in 24 months’ time.
focus on this is what will maintain our earnings track record into the
future. Progress on the development of a new distribution centre is well
underway, with the completion of the identification and procurement
Current trade of the site. Once zoning is obtained, the build can start. Completion
While the Mr Price Apparel division had a difficult trading period in date is expected to be August 2015. The work on resourcing and
the 3rd quarter, much of which can be ascribed to internal issues, we shipping from source is also progressing well. This will allow us to
are pleased to report that a good recovery was subsequently made. eliminate significant costs in the form of double duties, shipping and
The division also successfully spearheaded 2 major projects, being handling, making us more competitive as we enter new markets.
the expansion into Africa and the launch of our online business.
The Mr Price spirit
Our African expansion is not expected to result in a dramatic short- The results achieved in the past, as well as those we hope to achieve
term growth; however, we believe that many African countries are on in the future, are and will be, as a direct consequence of our people
strong economic growth paths that will see a significant expansion and the culture we have in our business. Our culture is built on
of their middle classes, to whom our fashion-value offer will appeal. Passion, Value and Partnership, with a high performance ethos.
By establishing our brand and infrastructure early in these growing
markets, we see significant potential in the medium to long-term. Investing in our people is critical to our future success. Over the
past year we trained over 9 300 of our associates, of whom 88%
During the year, a store was opened in Lagos, Nigeria and another were black, completing over 22 000 training courses. One of the
in Accra, Ghana. Within their 1st year of trade, these stores have biggest training interventions we undertook last year was about our
performed well, even after including the set up and regional costs. culture, with the update of our Dreams and Beliefs together with
While our results are pleasing, we intend to further improve our value the Milestones of the past. This was delivered to every one of our
proposition through supply chain enhancements. We will open further associates in the Group.
new stores in Nigeria this year and another in Ghana early in the
next financial year and we are actively looking for additional sites. Good progress has been made in achieving employment equity
targets. We do not view our transformation strategy as being one of
At the end of July 2012, we launched our online business a quick fix, but a medium-term one of building and investing in our
through the Mr Price Apparel division. The launch was internal pool of candidates who can successfully transition to senior
ambitious in that the full assortment was available immediately; positions.
it was completely omni-channel, fully mobile enabled as well as
allowing the customer 6 options to pay. In addition, delivery The way ahead
was guaranteed within 48 hours, but in reality it is below There is no doubt that the economic and consumer environment will
24 hours. The launch has been very successful, delivering a dynamic, continue to be a challenge, both at home and abroad. Nonetheless,
appealing, world-class site, with South Africa being an important we are confident that our formula of great fashion and quality at
environment in which to develop our capability. The way ahead is excellent prices will not only keep our customers happy, but will
to now open the site to the global environment, with specific focus attract many more new ones, both in geographies we currently trade
on certain countries, as well as bringing the other divisions onto our and in new territories.
online offering.
In closing, I would like to thank all of our dedicated associates across
The other divisions have delivered strong results this past year. They the Group, for not only delighting our customers and achieving the
are past their turnaround strategies and have grown well off what results we have, but also for making this such a special environment
have now become solid bases and expect further growth ahead. of which to be a part.You can also read
