Hide and seek
WHAT BETTER WAY for management to signal faith in a company’s prospects than to buy? This is what directors at House of Busby have done, taking their collective interest (direct and indirect) in issued share capital from 51,6% to 56,55% in the year to end-June 2006, according to its latest annual report.
Brothers and House of Busby founders Keith and David Brouze were most active; CEO Keith upped his indirect interest in the company by 23,8% to 18,8m shares, while non-executive director David increased his interest by 12% to just under 12m shares. It was only Busby Retail MD Martin Duarte who reduced his holding from 3,82% to 2,62%.
While attention tends to be focused on larger retailers such as Edgars Consolidated Stores (Edcon) and Woolworths, House of Busby has been quietly building a small empire away from the limelight.
Having listed in 1997 (and the result of a merger between Busby Leathergoods and Handbags International), House of Busby has grown into a wholesaler and retailer operating in both SA and Australia, selling eyewear, footwear and clothing by a number of international houses locally.
Recent additions to the brands stable all appeal to the well-heeled; they include footwear and accessory retailers Nine West and Aldo, and most recently, Spanish clothing retailer Mango.
With Nine West, the opening of the Nelspruit, Somerset West and Bloemfontein branches took the total number of outlets to 14.
Aldo is one of the newest brands in the company and there are aggressive roll-out plans for the brand, with 11 stores aimed to be up and running by 2007 and 16 by 2008.
The flagship store for ladieswear retailer Mango opened at Sandton City shopping centre in 2006; stores are being planned for Durban, Pretoria and Cape Town.
Ever- present concerns that retailers will experience a slowdown due to the Reserve Bank’s attempts to rein in consumers have not manifested into problems for Busby. A trading update for the first six months of business (to end-December 2006) show the company expects earnings and headline earnings per share to be between 30% and 40% higher than that for the same period in 2005.
Keith Brouze noted that rand weakness has exerted margin pressure on the distribution side of the business, but that this historically does not have an effect on the accessories side. Brouze wrote: “Fortunately, it seems that when the rand goes down, the customers dress up!” And with tourism being significantly boosted by a weaker exchange rate, this translates into a “pleasing effect” on the company’s luggage stores. “We look forward to the 2010 World Cup, which promises many lucrative opportunities in luggage,” said Brouze.