THE PRESSURE is building at tile and sanitaryware retailer Italtile now that the entry-level market is starting to feel the effects of the global economic credit crunch. That follows the release last week of the group’s interim results to end-December 2008, which showed a 2% drop in total turnover to R1,4bn.
Like building materials retailer Cashbuild, Italtile has focused on a cash-paying lower-to-middle-income earning market that’s protected it against the effects of high interest rates and stringent credit granting policies that have squeezed the middle-to-higher income market.
However, it won’t be able to escape the recent wave of retrenchments throughout many SA industries, which could hurt a major portion of its target customer base. As a result, it says it’s not going to maintain the earnings level achieved in financial 2008 in its 2009 annual results.
To help alleviate that Italtile has shifted its focus on locally produced tiles in its CTM stores and away from imports after noticing its customers have shied away from more expensive imported products.