Holdsport unit may pull off a sales sprint

SHAREHOLDERS in active brands retailer Holdsport should be happy campers, especially those that pitched their tents at R42 in the particularly soggy period at the end of July.

The share now bobs around the R50 mark, and Holdsport, despite a rather subdued interim trading period, confidently maintained its generous distribution policy with a 75c-a-share half-year payout.

With sports ingrained in our national psyche there should be a long-term “lifestyle” underpin for Holdsport’s flagship subsidiary, Sportsmans Warehouse. And every few years there’s a soccer, rugby or cricket world cup to boost merchandise sales. What might disturb the mood at Holdsport is the iffy performance of Outdoor Warehouse, which caters for hikers, campers and those keen to commune with nature — its sales crept up 1.8% to R142m in the six months to end-August.

By contrast, Sportsmans Warehouse sales were up almost 6%. On a like-for-like basis, stripping out the contribution from the 800m² Rustenburg Outdoor Warehouse that opened in the first half, sales were actually down 1.4% compared with the 3.4% gain registered by Sportsmans Warehouse.

However, Holdsport’s trading history shows that in previous years (specifically 2009 and 2011) Outdoor Warehouse was quite capable of outsprinting Sportsmans Warehouse. With an 1,100m² Outdoor Warehouse opening last month in Rondebosch, there might be a chance of some catch-up in the traditionally stronger second trading half.

PIONEER Foods said yesterday it needed to retrench workers, and while the move is unlikely to cause panic among trade unions as the positions to be cut are in middle management, the bigger picture is ominous. Like retailers, domestic food producers are under pressure from weak consumer demand. They are highly automated, but there are still jobs that could be made redundant as companies continue to search for cost-saving measures.

One analyst said yesterday that after visits to the factories of major food producers he had been left “quite surprised” by how automated they had become “and how little labour is actually used in the production of food” apart from the start of production lines, and the end, where products are packed.

At a major factory, the analyst said the entire process was automated, bar “the end of the conveyor belt, where there were hoards of employees” packing finished products. The company’s head said these positions would be automated “in due course”, the analyst said.

“If you look at all global food production operations, they are highly mechanised. In this country, because labour is still relatively cheap — well, it was — they can still get away with using labour rather than robots and mechanisation, but I think that is going to change.”