KFC, OK Zim re-open suspended operations
THE SHARE price of Swiss luxury group Richemont declined by more than 6 percent on Friday after the group reported slow sales growth in September as economic and geopolitical uncertainties spooked consumer demand.
Its share price closed 6.40 percent lower on the JSE on Friday at R96.78.
Richemont chairperson Johann Rupert said amid growing volatility in consumer demand, partly attributable to an uncertain economic and geopolitical environment, they maintain confidence in their ability to realise the group’s long-term ambitions, supported by the strength of its balance sheet.
The trade war between China and the US is affecting the maker of Cartier jewellery.
The group said, excluding Yoox Net-A-Porter (YNAP) and Watchfinder, sales rose by 6 percent at actual exchange rates and by 8 percent at constant exchange rates.
In the first five months of the reporting period Richemont grew its sales by 10 percent.
However, in some regions Richemont reported improved sales growth, especially in Europe and Asia Pacific.
In Europe with the first-time consolidation of YNAP and Watchfinder, both having a strong presence in Europe, sales in the region grew by 28 percent, while Asia Pacific reported 20 percent sales growth.
Europe and Asia Pacific accounted for 30 percent and 37 percent, respectively, of the group sales.
At the end of last month Richemont and Alibaba announced a joint venture to launch a luxury retail platform by bringing the retail offerings of YNAP group to the Chinese consumers.
It is the partnership Rupert expects to yield positive results in the future.
“During the past six months, Richemont strengthened its portfolio with two strategic investments aimed at offering our discerning and globally dispersed clientele more options. We now fully own YNAP, the leading online luxury retailer, and Watchfinder, a leading omni-channel platform for premium pre-owned timepieces. As part of the continual assessment of our portfolio, we divested Lancel,” Rupert said.
Richemont acquired R44.89bn early this year.
He added that these strategic changes had had a material impact on the group’s operating profit and net cash position in the period under review. YNAP for FAST FOODS and other retail operators in Zimbabwe, among them KFC and OK Zimbabwe, have re-opened outlets they had closed down a month ago when the country’s economy tipped down, hammered by rising operational costs and shortages of fuel and other raw materials.
KFC cited challenges in the economy for its decision to close down all its operations on October 11, while OK Zimbabwe said it was refurbishing its large outlet known as OK Mart in Harare.
Other retailers re-strategised by opening shorter times as they sought to contain costs and to manage panic buying by consumers as well as having fewer working shifts.
But on Friday, KFC re-opened its outlets in Zimbabwe; the company has four counters in Harare and two more outside the capital. The company said in a statement that it was “reopening our restaurants following the recent currency challenges that hit Zimbabwe which affected our supply” and operations.
“To our restaurant teams; we would like to welcome you back home, and to our loyal customers, we look forward to creating more Finger Lickin’ Good moments with you,” said Thabisa Mkhwanazi, the public affairs director for KFC Africa.
The fast foods counter competes against franchise operators of Nando’s, Steers and Chicken Inn.
“Yes we are now open. We don’t have the menu online yet – please can you visit the restaurant for assistance,” said an online customer service attendant asked about prices.
The company’s prices have risen by nearly 100 percent on some products. Retail operators say margins have been squeezed on the back of rising parallel market currency rates and that this has forced operators to pass on the costs to consumers.
Sources at one of the company’s outlets in Harare said by the time that the company suspended operations it had “stock for a few days”, most of which has had to be “written off” as the company seeks to start afresh.
One such large retail operator, OK Zimbabwe – which has re-opened its OK Mart outlet – has also complained about the 2 percent electronic transaction tax introduced by Finance Minister, Mthuli Ncube in October this year.
“The 2 percent intermediary tax penalises compliant taxpayers,” said OK Zimbabwe chief executive officer, Alex Siyavora.
SANDILE MCHUNU