HGR - Dec/Jan 2010 by Home Goods Retailer

December 2009 â&#x20AC;&#x201C; January 2010

Home Goods Retailer

Contents

December 2009 – January 2010 Readers' Forum

Market Review

Has Club Soda SA gone bust?

Newsline Ascot Bedding advances into 2010 with another new store Incredible Connection honours top suppliers JD Group earnings fall, but ‘trade will improve’ Lewis debtors’ book grows faster than sales as credit net tightens Hopes of retail recovery diminish Whirlpool launches new showroom It’s going to be a quiet Christmas LG relocates to Gosforth Office Park DionWired facilitates learning for blind and partially sighted learners Furniture retailers rewarded for Green Office support

GfK TEMAX SA Q3 2009 – No recovery yet for technical consumer goods market

Trade Shows 4 6 8 8 9 9 10 10 11

Hong Kong the value‑for‑money gateway to Asia Exhibitions essential in an economic downturn MIFF opens up a new avenue for the ID sector

20 20 20

Gallery Putting on a poker face Samsung provides food courses for fine causes South African cooking duo take the crown in international championship Philips launches affordable blu‑ray player People on the move

22 22 23 23 23

Shop Talk Retail solutions that work Coricraft customers’ in‑store experience enhanced through strategic design To rent or not to rent, liability is the question How to use wasted retail space effectively Reduce shrinkage with network video

12 13 14 14 15

Product Showcase Elegant outdoor lighting Sahara computers now with Windows 7 Experience the world of Blu‑ray In-car navigation made easier with Garmin nüvi 1000 series

16 16 17 17

Furniture Traders’ Association of South Africa Meubelhandelaarsvereniging van Suid‑Afrika (011) 789 6770 The FTA supports HGR but is in no official way associated with the magazine.

HGR Team Publisher & Editor‑in‑Chief Ian Hughes Email: ian@hgr.co.za

Editor Aurette Bowes Email: editor@hgr.co.za

Wi shing all our re a d e rs and a dve r ti s e rs a Me r r y Chr i stma s and pe a ce and pros pe r ity in the Ne w Ye ar.

National sales manager Frances Venter Cell: 072 607 5134 Email: sales@hgr.co.za

Marketing consultant Cherry Swanson Cell: 082 780 7976 Email: cearecruit@mweb.co.za

Design & Layout Bianca Keenan‑Smith Email: dtp@hgr.co.za

Special Projects Kerryn McMurray Email: kerryn@hgr.co.za

Administration & Subscriptions

Ian, Aurette, Frances, Sameera, Kerryn, Bianca and Cherry.

Sameera Hoosein Email: sameera@hgr.co.za

Office 203 Melrose Place (formerly Willowbrook) Willowbrook Close, Melrose North PO Box 41632 Craighall 2024 Tel: (011) 447 9326, Fax: (011) 447 9838 Email: info@hgr.co.za www.hgr.co.za

HGR will be closed from 11 December 2009 to 11 January 2010.

Printing Park Avenue Copyright on all editorial in Home Goods Retailer is owned by the publisher and reproduction without permission is prohibited. The opinions expressed in Home Goods Retailer are not necessarily the views held by the editor or publisher. We reserve the right to edit – for purposes of space and clarity – all editorial material and letters submitted for publication.

Home Goods Retailer – December 2009 – January 2010

Readers' Forum

Readers’ Forum Has Club Soda SA gone bust? I bought a Penguin soda machine, and need replacement bottles. I am trying to find the company from which I bought it, but it seems they are missing in action. Did club soda SA go bust? Were they taken over by another company? It’s a very expensive machine, and to have to throw it away because the bottles are broken will be very sad. Ben Fourie DaMa Software Dear Ben Unfortunately the Penguin Sodastream drinks maker is no longer available at retail outlets that initially stocked this product, but the good news is that the Penguin

Home Goods Retailer

drinks maker and its related products can be ordered directly from Sodastream’s head office in Pretoria. The Penguin is Sodastream’s top‑of‑therange drinks maker and Sodastream will continue to support customers who have purchased the Penguin by stocking and supplying replacement glass carbonating carafes and gas cylinders for this machine. Please contact our toll‑free Customer Care line on 0800 00 22 91 or call us directly on (012) 345 9220 and we will arrange to have your replacement glass carafe couriered directly to you. Guy Rogers Sales and marketing manager SA Sodastream

HGR goes alternate‑monthly as Commercial Interiors is relaunched

Have your say in HGR Got an opinion, observation, compliment or gripe about the home goods retail industry you would like to air? HGR Readers’ Forum is the perfect platform from which to do so. Send your letters to PO Box 41632, Craighall, 2024, fax 011 447 9838 or email editor@hgr. co.za. Letters may be edited for length or clarity. Your identity will be kept confidential if you prefer.

Commercial INTERIORS

The publishers of HGR have heard – and heeded – readers’ repeated requests to relaunch the very successful publication COMMERCIAL INTERIORS, South Africa’s only trade magazine servicing the burgeoning interiors contracts market. Targeted exclusively at specifiers, whether they be architects, interior designers and decorators, contractors and sub-contractors and other purchasers and buyers, the publication will provide a regular communications medium between all these professionals and their suppliers and vendors. The first issue of COMMERCIAL INTERIORS will appear in March 2010 and every alternate month thereafter. The publication will be edited by Aurette Bowes, with sales and marketing handled by Frances Venter and Pam Edwards. COMMERCIAL INTERIORS has an indispensable role to play in the market. So many of HGR’s clients are involved with the commercial and contracts market and apart from the many interior consumer journals, there is simply no publication exclusively targeting the professional specifier. COMMERCIAL INTERIORS will cover new projects, host interviews with architects and interior designers, and offer readers all the information they need to make informed choices about what to specify. To make it more feasible for our small company with its limited resources, HGR will also be published on a alternate-monthly basis from February 2010. It will continue to be edited by Aurette Bowes, with sales and marketing handled by Frances Venter and Cherry Swanson. All features and product surveys will be accommodated in these six issues, so there’s need to worry that your new products will not be represented. Naturally, as soon as these new schedules prove insufficient to offer the comprehensive services our HGR and COMMERCIAL INTERIORS readers deserve, we will revert to a monthly publishing format.

Newsline

advances into Ascot Bedding and Furniture’s seventh and newest retail store opened in October at The Glen shopping centre in Johannesburg south. The Glen services the affluent suburbs of Glenvista, Bassonia, Meyersdal, Brackenhurst and beyond. “The opening of the new store was a move we needed to make to satisfy the increasing demands for our products and services,” says Ascot CEO Leopold Dussing. “The new store offers a clean cut, contemporary and spacious feel that allows customers the opportunity to ‘try and buy’ – where each customer can try out a bed in store and then buy the one that suits their sleep requirements.

This is in line with Ascot’s objective to provide mattresses specifically suited to a person’s body weight.” Ascot stocks leading mattress brands such as Sealy, Cloud 9, Simmons, Rest Assured and its own in‑house brand, which carries the Ascot logo and the South African Bureau of Standards’ stamp of approval. Originally established in 1991 as a pawn shop, the company soon changed its business focus to one of selling mat‑ tresses and bedroom‑related furniture under the name Foam and Mattress King, wit the first store opening in Randridge Mall. The name was eventually changed

Newsline

2010 with another new store to Ascot Bedding and Furniture and the first family named store opened at Woodmead. The original two‑man team has grown into a leading family business that today boasts a staff complement of 24 well‑trained proud ambassadors, who service seven stores across Gauteng, namely Woodmead, Alberton, Brackenhurst, Stoneridge Mall, Randburg, Heidelberg and The Glen. Besides its retail outlets, the Ascot group also has a contracting division which supplies mattresses and furniture to the hotel and guesthouse industries, game lodges and interior decorators.

Bedding and furniture are also exported to neighbouring countries Zimbabwe and Botswana. Dussing attributes Ascot’s rising success to an executive team that pays close attention to keeping company overheads to a minimum, as well as a consistent system of values implemented by each staff member in the company. “With each product sold, the client receives personal service that includes attention to detail and instills peace of mind,” he says. “In this way we establish a trust base that ensures repeat business for the group.”

Home Goods Retailer – December 2009 – January 2010

Newsline

Incredible Connection

honours top suppliers Specialist retailer Incredible Connection, a member of the JD Group, paid tribute to its top suppliers at a glitzy awards dinner on 29 October. Acer was named both Vendor of the Year and Best Support Services Supplier, while Trimark collected the award for Supplier of the Year. The Media Shop was named Best Services Supplier of the Year. In Incredible Connection’s 50 Fifty Supplier of the Year incentive programme, 12 suppliers were named finalists, with GOPIC collecting the top honours of 50 Fifty Supplier of the Year.

Gopic’s Alan Mendelsohn collects the 50 Fifty Supplier of the Year winner’s cheque from Incredible Connection CEO Dave Miller and merchandise executive Roger Wood.

The Media Shop was named Best Services Supplier of the Year. Dave Miller (centre) and Roger Wood (right) presented the award to Chris Botha (left).

Romain du Gardier (Logitech) with Dave Miller (Incredible Connection).

Ronny Russell (Phoenix) with Dave Miller (Incredible Connection).

Hanle Carver (Comztek) with Dave Miller (Incredible Connection).

Mario Santos (Ster Kinekor) with Dave Miller (Incredible Connection).

Heidi de Bloe (Tarsus) with Dave Miller (Incredible Connection).

Akashni Naidoo Workgroup) with Dave Miller (Incredible Connection).

Home Goods Retailer – December 2009 – January 2010

Newsline

50 Fifty Supplier of the Year finalists

Jonathan Holton (Grayford Holton and Associates).

Nikki van Straaten (Canon) with Dave Miller (Incredible Connection).

Michelle Kasselma (Iomega) with Dave Miller (Incredible Connection).

Joost Jetten (TomTom) with Dave Miller (Incredible Connection).

Adam Dixon (Symantec) with Dave Miller (Incredible Connection).

Piers Proctor (Samsung) with Dave Miller (Incredible Connection).

Dave Malherbe (Acer) received the award for Best Support Service Supplier from Dave Miller and Roger Wood.

Acer was also named Best Vendor of the Year. The award was presented to Graham Braum (left) by Dave Miller and Roger Wood.

Trimark’s Lorencia de Beer received the award for Supplier of the Year from Dave Miller and Roger Wood.

Home Goods Retailer – December 2009 – January 2010

Newsline

JD Group earnings fall, but ‘trade will improve’ A slowdown in spending by overly indebted high‑income earning customers is the reason for JD Group’s sharp decline in earnings for the year to August, says CEO David Sussman, but adds that trading in recent months points to improved conditions in the new financial year. Bad debt and poor trading performance at Hi‑Fi Corporation, which is currently being restructured, were the two main factors negatively affecting JD’s results. Hi‑Fi Corporation and the group’s other cash retail business delivered lower revenue of R3.98 billion, compared to R4.01 last year. The group’s traditional retail division reported stable merchandise sales of R4.47 billion against last year’s R4.49 billion. Headline earnings per share plummeted 85 per cent to 44.2 cents a share while bad debt charges grew 23.5 per cent to R1.1 billion. But Sussman says the debtors’ book is beginning to stabilise after initial deterioration, following the completion of

the centralisation of collections earlier in the year. Group turnover increased marginally by 2.5 per cent to R12 billion, while operating profit after debtors’ and a R98 million restructuring cost declined by 18.9 per cent to R646 million. Gross profit increased by 6.4 per cent to R2.8 billion while gross profit margin improved to 30.5 per cent from 28.6 per cent in the previous year. “Our restructuring strategy – to separate our activities into focused retail and financial services businesses – has started to deliver tangible benefits,” says Sussman. The restructuring now sees the group focused on a retail business, with traditional, cash and international retail operations, and a separate financial services business looking after the debtors’ book and insurance business, as well as the new business division of Blake and Maravedi. “At the half‑year stage we advised that the worst was definitely over,” says Sussman.

David Sussman: “The worst is over.” “The trading performance for the past six months confirms this and we see clear signs that the market is stabilising. “While it will take time for consumers to rebuild a capacity for new debt, the fundamentals are in place in the JD Group and we look forward to an improved, albeit challenging year ahead.”

Lewis debtors’ book grows faster than sales as credit net tightens

Johan Enslin: “A good result given the operating environment.” Lower interest rates, stabilising food prices and higher real wage increases may be positive for consumers, but the credit environment, short time, rising unemployment and retrenchments remain a risk for sustained improvement, this according to Lewis chief executive Johan Enslin. Reporting on the company’s interim results for the year to September 2009 8

Enslin says financial stress on consumers had resulted in debtor costs increasing from 4.5 to 5 per cent of net debtors in the tightening credit collections environment. Headline earnings fell 3.9 per cent to 290.5 cents and net profit attributable to ordinary shareholders dipped 3.3 per cent to R261.3 million. Nevertheless, Enslin describes the results as “encouraging”, given the difficult trading conditions faced by retailers as consumers rein in on spending. The improving trend in revenue growth experienced in the latter stages of the 2009 financial year continued, with revenue for the six‑month period increasing by 7.9 per cent to R1.9 billion and merchandise sales growing by 6.8 per cent to R951 million. Additionally, operating profit increased by 4.3 per cent to R424.2 million. Enslin notes that revenue growth has shown consistent improvement over the past 18 months, growing by 5, 6.6 and 7.9 per cent over the past three six‑month reporting periods. Furniture and appliance sales, which contribute 80 per cent of group sales,

Home Goods Retailer – December 2009 – January 2010

increased by 7.8 per cent for the six months, while sales of the more discretionary electronic merchandise grew by 2.8 per cent. The flagship Lewis brand, which accounts for 85 per cent of merchandise sales, grew revenue by 7.9 per cent. Best Home and Electric lifted sales by 10.2 per cent and Lifestyle Living by 0.8 per cent. Besides introducing several new furniture ranges, the group opened five Lewis stores and three Best Home and Electric outlets in the past six months. “Our small store model is proving successful and the five stores in this format are all performing ahead of expectations,” says Enslin. “A further seven to ten stores are planned for the second half, with four small‑format Lewis stores scheduled to be opened in November. “Lewis continues to differentiate its offering with exclusive ranges which offer value for money to consumers in the current tough environment,” Enslin continues. “The festive season trading period will be strongly supported by merchandise and promotional campaigns to maximise sales opportunities.”

Newsline

Hopes of retail recovery diminish Hopes that retail trade sales would pick up towards the end of the year were dashed by a significant drop in September year‑on‑year figures released by Statistics SA. Analysts said the disappointing numbers were conflicting with actual sales recorded by some retailers, who claimed to have increased revenues. The data showed retail sales fell 5.1 per cent in September from a revised minus 6.5 per cent, compared with minus seven per cent in August. Retail analysts described the latest figures as “wholly uninspiring” saying it showed that a recovery in consumer spending was still a long way off. “These figures contain nine months of sustained reduction in interest rates and yet there is still no sign of recovery,” says Absa Asset Management retail analyst Chris Gilmour. “The retail sales figures conflict with sales figures for major retailers such as Mr Price, which boosted its market share and grew sales by 10.8 per cent to R4.3 billion in the six months to September.” In the same period, furniture group Lewis had increased revenue by 7.9 per cent to R1.9 billion, while grocery giant Shoprite grew turnover by 15.3 per cent in the three months to October. Gilmour says it is clear from his talks with JD Group and Lewis that October was the companies’ best month for collections so far. “Perhaps people are just focusing on reducing their indebtedness,” he says. Both Gilmour and RMB Asset Management retail analyst Ewan Walker feel the escalating unemployment rate is puncturing retail sales, which in turn will hurt gross domestic product figures. “The high level of retrenchments this year is beginning to have an increasingly negative effect,” says Walker. “But since the figure is slightly better than in August, I think we are starting to see food inflation come off, as well as a slight uptick in semi‑durables and durables.” Nedbank Economic Unit economist Dennis Dykes says the rate of decline in retail sales should moderate further in the months ahead as the festive season approaches. “While sales of non‑durable and semi‑durable goods will gain support during the season, sales of durable goods could remain under pressure as consumers remain cautious on the back of job uncertainty and depressed incomes.” Dykes adds that the decline in retail sales suggests that domestic demand is slowly starting to flatten out. “However, the monetary policy committee decision to leave interest rates unchanged suggests that there is now little chance of any further cuts in interest rates unless conditions deteriorate once more or the inflation outlook brightens unexpectedly. We now expect rates to remain on hold until early 2011.” Source: Business Report

Whirlpool launches new showroom Whirlpool has launched an innovative showroom at its new head office in Riley Road Office Park, Bedfordview. The 270m² show‑ room features a fully functional kitchen to encourage interactive experience with the products, and allows the company to display and demonstrate the use of the innovative range of products Whirlpool offers consumers, including the new design line, Car‑ isma and the Essence Cooking Set. “Whirlpool continues its long-term strategy to develop the business in the South African market,” says managing director Stefan Egli. “The new premises enables us to show trade partners and other key clients the opportunity to view and experience the Whirlpool and KIC products on offer.”

Whirlpool’s new showroom contains a fully functional kitchen.

Whirlpool’s new head office building in Riley Office Park, Bedfordview. Home Goods Retailer – December 2009 – January 2010

Newsline

CEA Recruitment CON SUMER ELECTRONICS & APPLIANCES We invite candidates interested in the positions listed below or looking for a career move to submit their CV in confidence.

MARKETING MANAGERS, PRODUCT/ BRAND MANAGERS, MARKETING CO-ORDINATORS • Diploma/degree in marketing • Must have relevant proven experience • Understanding of marketing, advertising and media related functions • Sales and promotion planning and implementation • Candidates must be articulate, analytical and have strong presentation skills • Product procurement and relevant administration • Consumer electronics industry experience an advantage

SALES MANAGERS, REGIONAL MANAGERS, KEY ACCOUNTS, SALES REPRESENTATIVES • Relevant sales and marketing experience/qualification • Successful sales background • Customer orientated, shop front support • Industry experience an advantage • Strong negotiation and communication skills • Must be able to identify new business opportunities and expand on customer base • Product knowledge training • Good administration, planning and organisational skills • Computer literacy (MS Office)

ADMINISTRATIVE POSITIONS Office/Sales Administrators, Data Capturers, PA’s / Secretaries Credit Controllers, Debtors Clerks Shipping Clerks, Warehouse/Stock Controllers Using a specialist recruitment agency that understands the market and which will dedicate itself to discussing your needs and searching for suitable candidates is of importance. With CEA as your partner, you will have taken the first step towards a successful recruitment drive. Enquiries: Cherry Swanson Cell: 082 780 7976 Tel: (011) 463 1177, Fax: 086 501 5059 e-mail: cearecruit@mweb.co.za PO Box 71876 Bryanston 2021

It’s going to be a quiet Christmas It’s been a year since interest rates started to fall and consumers are beginning to feel healthier. But, says Massmart CEO Grant Pattison, the pressures of the South African economy are not so much about consumer confidence going up or down – “I think it’s definitely going up” – but Grant Pattison: expecting about unemployment. subdued festive season sales. “Those who’ve survived the recession and still have jobs are feeling better about their financial situation, but a larger group of unemployed consumers now exists and their effect on the economy will be the challenge,” he says in an interview with Fin 24. Commenting on his expectations for the festive season, Pattison advises retailers to examine the most recent sales trends when planning for Christmas. “There’s no question that inflation is lower – which is good for consumers – but this often puts pressure on sales. But despite the lower interest rates consumers seem to be focusing on reducing their indebtedness rather than spending. Our own experience has been that customers are shopping more on promotion and less on pick‑up lines. “I don’t think we can expect Christmas to be significantly different from the most recent trends, and in Massmart’s case that’s very low comparable sales growth,” Pattison concludes.

LG relocates to Gosforth Office Park Johannesburgers have a new “Life’s Good” landmark, following LG Electronics’ move to a highly visible site in Monte Carlo drive, Gosforth Park, close to the N3 Highway. CEO Peet van Rooyen says the move, which consolidates the consumer electronics supplier’s three warehouses and offices in one site, highlights LG’s commitment towards change and progressive transformation and brings the company a step closer to achieving its corporate mission, which is “to be the most‑preferred and best‑performing consumer electronics brand by 2010. “The move will enhance the level and quality of customer service to consumers and dealers,” Van Rooyen adds. New warehousing and logistics partners will take over once the move is complete.” The new LG offices are conveniently positioned and easily accessible from all the main highways. Marketing director Dr Michelle Potgieter is pleased with the excellent brand exposure: “The LG offices are going to be a real landmark, keeping our brand top‑of‑mind.”

Newsline

DionWired facilitates learning for blind and partially sighted learners High‑end technology chain DionWired has sponsored Filadelfia Secondary School with an assistive technology laboratory to the value of R250 000 to upgrade the learning environment for blind and partially sighted learners. The lab, which consists of state‑of‑the‑art computer equipment and specialised software, was officially handed over to the school in October by DionWired general manager Andrew Jackson, along with DionWired staff. The event was also attended by directors and officials from the District Department of Education, Incredible Solutions and the National Council for Persons with Physical Disabilities in South Africa (NCPPDSA) chairman Johan Viljoen. Filadelfia Secondary School is located in Soshanguve, Gauteng and opened in 1985. The school caters for partially sighted, blind, deaf and physically disabled learners (474 in total) from all corners of South Africa. Blind and low‑vision learners have to meet the same criteria as learners in mainstream schools as they follow the same curriculum, complete the same assignments and write the same examinations. “DionWired’s sponsorship initiative aims at solving the problems faced by these learners through the development of the assistive technology laboratory equipped with equipment such as an OCR device and the zoom twix extra,” explains Jackson. “The OCR device is a portable scanner that enables reading for low‑vision users. The zoom‑extra scanner also includes a text‑to‑speech function. Scanning is faster than traditional scanners because the motion detector scans 20 pages per minute. A further function is that a CCTV camera can project images such as posters onto the computer screen. The laboratory

DionWired general manager Andrew Jackson (left), Grade 11 learner Celia Makhavu and NCPPDSA chairman Johan Viljoen. will also be equipped with multipurpose screen access of which key features include screen magnification for low‑vision users and converting text to speech for blind users.” “The education and services that we need to render to our learners are expensive and unique,” says principal Willem van der Merwe. “Besides the subsidy received from the National Department of Education, the school still needs to fundraise to be able to render professional services to our learners. We rely on and greatly appreciate positive contributions such as that made by DionWired.” The DionWired staff who attended the event provided the learners with their first lessons on the use and advantages of the specialised software and innovative technology. “We are confident that the use of this technology will reduce the barriers and restrictions currently experienced by blind and low‑vision learners, and enhance teaching and learning within the schooling environment,” says Jackson.

Furniture retailers rewarded for Green Office support

Wayne Fyvie (right) and Roxanne Broughton (second right) of Green Office are happy to part with money for a worthy cause. Here they hand over a cheque for the Ellerine Holdings Trust Fund to Rod Ward (left) and Tyronne Du Plessis (second left) at the head office of Ellerine Holdings Limited in Sandton. The funds were generated through the supply of used computer printer cartridges to Green Office for recycling.

Former Springbok rugby player and Sharks forward Wayne Fyvie has rewarded Ellerine Holdings Limited with a cheque of R12 270.30 for the Ellerine Holdings Trust Fund, for the company’s support of his Green Office recycling initiative. Companies collect their used computer printer cartridges and supply them to Green Office for recycling. In return, Fyvie makes out a cheque to a non‑profit organisation of the collector’s choice. Cartridges were collected from Beares, Lubners, Furniture City, Geen & Richards and Dial‑a‑Bed stores throughout the country. Funds raised will assist abused children at child‑friendly police stations through the Matla a Bana organisation that was started by Monique Strydom. “Recycling is a win‑win situation for everyone,” says Fyvie, who is no stranger to winning both on and off the rugby field. “The company wins, your favourite charity wins and the environment wins.” Over R700 000 has been generated by Fyvie since the inception of Green Office, assisting more than 30 different registered charity organisations while helping to empower people with disabilities through the cartridge collection programme. Home Goods Retailer – December 2009 – January 2010

Shop Talk

Retail solutions that work Derek Patrick: ensuring brand longevity.

Some retail environments just make consumers feel at home. The merchandise suits their style, the layout makes sense and the shopping experience is positive. The store has that “indefinable something” that makes it work. For one South African company, defining and packaging that “indefinable something” is the business that has made it an international leader in its field.

The Design Company (TDC) does far more than its name would imply. In a conversation with the leadership team – which includes founding member and CEO Derek Patrick, Marc Olivier and Paul Knutsen – you won’t hear much said about what colour the walls should be, or whether that chandelier is just right. What you will hear are passionate discussions about aspects of “brand DNA”, “retail solutions” and “a total strategy”. “Our understanding of retail is far more that just design,” Patrick explains. “Anyone can come up with a design idea and draw pretty pictures, but that’s not what we do. We provide a solution that means longevity for the brand.” It is this emphasis on the brand that means that although TDC is not yet a household name, the brands the company has helped to create most certainly are. Awards achieved by TDC, including recently being selected as one of the top four in the world for convenience retailing in terms of store design, have helped to underline its impact on the global market. The client list of the company that was 12

Incredible Connection is just one brand on The Design Company’s long list of successful store designs. started in Patrick’s spare bedroom 16 years ago certainly reads like a who’s who of South African retailing: Markham, Spitz, @ home, Wellness Warehouse, Queenspark, Waltons, The Pro Shop, Pick n Pay, KFC, Sterns, Hi Fi Corporation, J Crew... the list goes on and on. “We don’t start drawing until we under‑ stand what the brand DNA is,” says Olivier. “The first step is always to define the strat‑ egy for the brand. It is part of understanding the mechanics of what the brand must do. “We include the client in the process. The research and strategic planning are carried out in partnership with them so that by the time we produce the design brief, it is what they expect.” This method of working has a number of benefits, says Patrick. “We don’t work for people. We work with people, in team with our clients.” It is this humble approach that means that clients’ brand managers do not feel threatened, and are more than happy to work with TDC to create the right solution for their brand. Another benefit is the speed at which the company can open new stores once the concept has been produced. The company’s record for store rollout is when it opened 75 stores in four days. “Because the design has been developed in consultation with the client, we can roll out 80 to 90 stores in a year,” says Olivier. “Markham is a good example: the first store opened within six weeks of the design being approved. That means that the merchandising, music, product offering and branding were all in place. Our strategy works because we don’t massage a client to make them agree to our design. Because we have a clear understanding of the product, our design reflects and supports the brand.”

Home Goods Retailer – December 2009 – January 2010

Paul Knutsen: providing true value engineering.

Mark Olivier: adopting a three‑dimensional approach TDC’s emphasis on the brand offering has also been applied to the company. “We offer a number of services, all backed by good, solid business decisions,” explains Knutsen. “And we apply just as rigorous standards to our own business.” This strategy is certainly paying off: TDC has seen an increase in revenues over the past year, in spite of the global recession. “When a new client wants to know what we do, we simply direct them to their nearest mall,” says Patrick. “Our work is in virtually every mall in the country. In a recent big mall extension in Pretoria, 40 per cent of the stores were designed by TDC.” “We provide an end‑to end‑solution, from creating the brand through to merchandising and we are also able to offer clients specific items on our menu of services,” Knutsen adds. “For this to work, several disciplines have to be in place, all doing the work that they do best. You’ll never find one of our designers doing procurement, or a project manager using CAD; each node has a dedicated team.”

page 15 ►

Home Goods Retailer

Written & Compiled by Ian Hughes Sales & Publishing Co-ordinator Kerryn McMurray Email: kerryn@hgr.co.za Design & Layout Bianca Keenan窶全mith Administration Sameera Hoosein Publisher Ian Hughes Email: ian@hgr.co.za Office 203 Melrose Place Willowbrook Close Melrose North PO Box 41632 Craighall 2024 Tel: (011) 447 9326 Fax: (011) 447 9838 Email: info@hgr.co.za www.hgr.co.za Printing Park Avenue

This Simmons Corporate Profile has been published on behalf of Simmons by Home Goods Retailer. 2009

Contents Iqbal Bam �� 3 Liz Milne �� 7 Ahmed Omar ��11 Shumaiz Hashim �� 13 Simmons Product Portfolio �� 15

Foreword It makes me enormously proud to introduce to our customers, and indeed to the wider trade too, this brief Company Profile on Simmons Bedding. As most of you know, Simmons’ presence in South Africa has been relatively recent, but in that short time we have established a very satisfying niche for ourselves amongst many independents. Indeed, today there can be very few in our trade who do not know the name Simmons. The image and brand is now firmly entrenched as part of the broader beds and bedding supplier environment, and certainly today Simmons is a byword for quality, innovation and state-of-the-art technology. But of course, our job is nowhere near done. The market still offers Simmons tremendous opportunities for further development. The contracts and hospitality markets offer further rich potential and exports will also certainly have a role in our further growth. What we have attempted to do in the Profile is simply to share with you our customers and the trade in general a few insights into our thinking and our operations. Our culture as a wholly owned South African manufacturer, albeit with strong global links has shaped our progress and our development. We very much hope that it will be as interesting for you to read as it was for us to get it together for publication.

Iqbal Bam The name Simmons is inextricably linked

under the name of Loungefurn. “Majestic Lounge was aimed at a

with the man who brought this premium brand into South Africa, and Iqbal Bam

certain market and at certain price

as the man responsible, is similarly linked

points and Loungefurn was to cater for

with the broader bedding industry of the

a different market and different price

country and has been for many years.

points. Loungefurn too soon acquired

But where is he from and what brought

market acceptance and I then decided to

this ‘out of the ordinary’ entrepreneur

open another factory called Loungeweave

into the furniture and bedding industry

and that was followed by Loungefoam.” In 1992 he opened Majestic Bedding –

and propelled him along the road to the pinnacle of his industry today? Iqbal Bam is a Natal born man – Durban to be

“… my first venture into the bedding market.” But looking ahead and displaying the vision

precise – and comes from a family of retailers. He

that had become his hallmark, Iqbal travelled to

explained: “My grandfather was one of the very first

America to look for further bedding opportunities. “I

Indian retailers in Natal and my father was a furniture

had made the decision that bedding presented the

retailer. My brother ran a case goods factory and

best opportunity for me so I focused on Simmons.

when I left school he invited me to join him. It was a

Simmons was – and is – a leading premium brand

good option for me as he taught me a great deal and

in America.”

I learned much about furniture manufacturing.” After 10 years with his brother, Iqbal quit and

“For example, it is still the leading manufacturer producing pocket coils for bedding which guarantees

joined a cane furniture manufacturer. “It was further

extreme comfort and stability. Of course it was not

experience I suppose” he declared, “but it didn’t

easy getting the manufacturing licence. It was 1994

excite me and after a year I made the decision to

and although Nelson Mandela had been released,

leave and start up my own business.” He determined

things remained very uncertain in South Africa.”

that with his experience lounge furniture would be

Although he finally obtained the licence the major

his first venture, and launched Majestic Lounge. Was

condition was that it would only be confirmed after

he worried about taking this initiative? Of going on

the 1996 elections.

his own? “I think everybody who starts a new business

Iqbal explained: “Simmons was understandably wary about our stability, but in anticipation that

gets nervous. After all, new businesses, whatever

things would work out, I stayed on at Simmons to

the type, offers risk. But after my 11 years in

learn and familiarize myself with their production

manufacturing I knew roughly what to do and

processes. I also bought their patented plant to

what not to do. I had also got to know a lot of the

manufacture their unique beds. For the next few

customers, mostly the independent retailers, so I

years I carried on as before as part of Steinhoff, but

started focusing on them at first,” said Iqbal. He did

when my licence was confirmed in 1996 after the

well with them and in due course managed to get

election I set up the Simmons factory in Isithebe.”

Majestic Lounge listed with the huge JD Group. For a relatively new entrant into this most

The acumen and energy that Iqbal brought to all his ventures guaranteed their success. By 1997 he

competitive of markets, that success offered the seal

had six thriving factories and became a target for the

of approval and definitely signaled the arrival of a

embryonic Steinhoff Group. “Under Markus Jooste

major force. Explained Iqbal: “It meant that Majestic

and Martin Herr they were busy acquiring factories in

Lounge had met the strict criteria that JD imposes on

furniture and bedding, and I decided to accept their

its suppliers in terms of quality, ability to deliver in

approach to merge my factories under the Steinhoff

volume, value for money and design.”

umbrella,” Indicated Iqbal.

In December 1989, Majestic Lounge was destroyed

In 1999 he decided the corporate life was not for

in a fire and the factory was burnt down with no

him and sold his shareholding in his factories over

insurance. Iqbal paid off his creditors and in 1990,

to Steinhoff. “So I became a part of Steinhoff but

started off from scratch and re-opened in Isithebe

page 5 ►

◄

page 3 | Iqbal Bam

in my mind that the more expensive beds have done

I still ran my own division – the factories which I

very well in this period. Another reason why we are

had started.”

doing well is Simmons’ penetration of the contracts

“With the exception of Simmons,” he emphasizes.

market. We are growing our share of that market

“I wanted Simmons and I kept it. I left Isithebe and

very substantially. As an example Simmons is now

set up a new Simmons factory in Stanger.” How did it

being supplied to Sun International and Southern

go in those early Simmons days? “It was tough,” he

Sun hotels and I believe the potential for us with the

confesses, “nobody in South Africa had ever heard of

approach of 2010 is enormous.”

Simmons, let alone the pocket coil which was a brand new concept over here.” “I was also now competing with Steinhoff, I was

“There are new hotels going up, all requiring beds, upgrades of existing establishments and resorts and new B&Bs too,” he continued. “We have

no longer a part of them, and their premium brands

excellent relations with the specifiers, contractors

were all well established. And of course they also had

and designers, so am justifiably optimistic. The other

the considerable Steinhoff muscle behind them. So

rewarding thing,” confided Iqbal, “is that we get

yes, it was tough getting any sort of market share.

constant referrals from chiropractors to their clients.

I decided I would leave the groups to Steinhoff and

So all in all Simmons as a brand is well and truly on

would concentrate on the independents throughout

the map.”

the country.”

His factory does get occasional visits from

Iqbal’s persistence allied to the quality branded

Simmons in America. “I think they do this with all

product he was selling slowly started to pay off and

their global licensees, they like to keep in contact,

Simmons became more and more of a presence

check on our progress and ensure they like what they

amongst independents nationally. Has Simmons in

see. Up to now I think they have been delighted with

America taken notice of the inroads he has made with

us,” said Iqbal happily. Early in 2010 Simmons will be

the brand? “Absolutely,” he declares with enthusiasm,

launching a new range of products “… with additional

“they’ve been delighted with what we have achieved

health benefits, well in time to capitalize on further

here – our handling of the brand. I don’t think there

opportunities that should arise,” he revealed.

is much doubt locally that Simmons is now the best premium brand in the market.” As Simmons made more and more inroads into

He describes himself as a ‘hands on’ manager. “Definitely, I get totally involved with all aspects of development and design, production and

the premium bedding market, Iqbal Bam was faced

procurement.” In the industry, and outside in the

with a growing demand for an entry-level product.

wider Islamic business world, Iqbal Bam has acquired

“Under the circumstances I decided to offer a new

legendary status. He modestly admits that Wesbank

house brand called Majestic. This has certainly

Islamic Finance awarded his company the prestigious

satisfied those many customers who wanted a more

Business of the Year in 2008 and that he was a finalist

basic value-for-money product. So I had the volume

in the Standard Bank Business Awards. “We give back

market and the premium market covered and then

what we can,” he says simply.

last year – 2008 – we launched the Eclipse brand.

Although not part of his bedding business, Iqbal

This brand was to take care of the middle market.

Bam also owns and runs a furniture manufacturing

Eclipse offers an ergonomically designed bed at a

company known as TechnoLounge. “It’s just

very reasonable price.”

down the road from us at Simmons and I keep

Iqbal strongly believes in his products. “I think

it entirely separate. Sales, procurement, labour,

quality sleep is very important and as consumers get

transport and management are completely their

more health conscious they look for beds which can

own. TechnoLounge too caters exclusively for

provide them with that. Our mattresses do exactly

the independent retailer and is also proving very

that and is undoubtedly a powerful reason why our

successful,” concluded Iqbal Bam.

products have been so widely accepted,” he stated with confidence. Despite the savage economic downturn of the past

So this modest son of a furniture retailer has truly scaled the heights of his industry and in a relatively short time has made an indelible mark on the face of

15 months, Simmons has maintained its’ growth.

South African furniture and bedding manufacture. Our

Said Iqbal: “I think that the premium bedding market

advice? Keep your eye on him. There is undoubtedly

has been relatively unaffected. There is no question

much more to come from Iqbal Bam.

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Liz Milne The hugely successful imposition of the

generosity from everybody we met,”

globally famous Simmons brand on the

she marvels. As for their small car, it

psyche of South African retailers can

didn’t miss a beat.

be put down to the hard work of two

Back home she found a job at Softex.

people. Iqbal Bam and Liz Milne. Iqbal’s

“Back then it was a small, independently

achievements in this regard have been

owned company based in Durban

singular and well documented, but it has

with a sales and distribution office in

been Liz, beavering away at the sharp

Doornfontein,” she recalled. “Although

end of sales and marketing, who has

my job was supposed to be in the office,

critically helped consolidate and promote

I found myself doing more and more

the astonishing growth of the brand and company, firstly in Gauteng and then nationally. Her experience in the industry has been almost exclusively with beds, so it was this massive experience that persuaded Iqbal that she was the

in the warehouse. Ultimately I was managing the warehouse, but it was there at Softex that I learned the bedding business. I was there from 1972 right up to 1998.” “I learned the technicalities of bedding and its

right person to run his newly set up Johannesburg

construction, about distribution and above all

office and showroom. But where did she come from

met and made friends with the retailers. Yes, I

and where did she acquire the experience and life

was enjoying it,” she confirms, “especially as the

skills that took her to Simmons, and then enabled

company grew and we moved to larger premises

her to make such a success of the opportunity

close to John Vorster Square in town. By then we

handed her?

were big enough to justify employing a full time

The Johannesburg born Liz’s story, and it is an interesting one, started with a honeymoon cruise to the UK. She related it: “We had no intentions of an

warehouse manager, so I was able to focus on the administration.” In the Eighties the company was acquired by the

immediate return to Johannesburg, so I took a job

SA Breweries subsidiary Afcol. Was her job affected

in London and so did my husband. We worked there

in any way? “Not in the slightest, they left us alone

for two years. Our plan was to do a road trip back to

recognizing that we knew what we were doing. I

Johannesburg taking in Scotland, Ireland, through

was still doing all the admin, and of course Softex

England, into Europe and then across Africa,

had grown, it was much bigger than when I first

“We had a small Renault 4 and it did us proud. We toured Ireland and the UK, crossed over to France,

started with them,” said Liz. In the late-nineties Afcol sold out to Pat Cornick.

meandered through Europe and ended up in Turkey.

“Naturally, they embarked on reconstruction, a

From Turkey we took a ship to Israel ending up in

new broom and all that, and Softex was closed.”

Eilat where we spent some time gathering our breath

She wasn’t retrenched, her 25 years of experience

and making a little more money. I actually guarded

with Softex was too valuable and she was sent

backpackers’ bags and belongings on the beach

to Edblo. “I worked at their factory in Langlaate

while my husband worked on construction sites.”

for a year, essentially managing their distribution

From Israel they enterprisingly found a fishing boat to ferry them down the African coast to

and warehouse.” “And then Iqbal contacted me. He had a small

Eritrea, “with the little car taking up most of the

Simmons warehouse in Honeydew – at that time

available space on the deck,” is how Liz remembers

Simmons was owned by Steinhoff,” clarified Liz,

it. And then they commenced the truly epic part

“and was battling with staff and other problems,

of their trip home – “through Ethiopia, Kenya,

would I be interested in running it? Edblo was in

Tanzania, Zambia, Rhodesia and finally home to

turmoil and the staff very unsettled, so I accepted,”

South Africa. Altogether that trip took six months

declared Liz simply. That was in 1999. “Being small,

covering ± 30 000 km, it was the most amazing

it was just me doing everything once again. I was

experience and it really illustrated how kind

in charge of the Gauteng office and looking after

people are. We experienced so much kindness and

page 9 ►

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◄

page 7 | Liz Milne

distribution to customers.” “But of course,” admitted Liz, “it was all very

Looking ahead to the future Liz Milne remains very buoyant. “We’ve just launched a new range of truly advanced beds with Dial-a-Bed – five models

familiar to me so I really slotted in easily.” And then

in all sizes – each with its own specific features and

Iqbal Bam acquired Simmons back from Steinhoff

benefits. We call it the Silver Collection and it has

in 2000. “We were finally an independent company

anti-bacterial properties including health benefits

and had grown quite a bit in the two years since

from the Silver treatment on the fabric. This is very

I had joined, and so we were forced to move to

much a premium product, and will be launching in

larger premises in Benrose. However, we were still

time for Christmas”, she declared.

faced with chronic staff problems especially with

“The Simmons company and brand defines itself

regard to sales. It was a very unstable situation,”

by innovation,” continued Liz. “And let’s face it,

she confessed. So when Iqbal approached her to

the Simmons pocket coil was the most advanced

take over the sales and marketing, she was both

technology in recent years, it was a breakthrough.

daunted and excited by the challenge.

Perhaps memory foam comes closest in terms of

“Don’t forget I was a one woman team! I was still

new technology. Today, in general, beds are much

running the admin and the warehouse in Gauteng,

more cushiony and luxurious, resilient and yielding

but obviously I was very familiar with the product.

offering body contouring and much more. And then

I was immensely impressed by the Simmons brand

there are the fabrics – there is so much innovation

and technology, especially the pocketed coil, and

in fabrics today, with bamboo, aloe vera and silver

just knew we could crack it. And very importantly

offering superb advantages to better health.”

for me, I also knew our customers well.” So Liz Milne dived into the deep end of sales and marketing. From the first day, the decision was made to

She is convinced that quality bedding, especially a premium brand like Simmons still has enormous potential in South Africa as people become more

concentrate on the independents. “At that stage

aware of the importance of quality sleep. “But as an

we were too small to go for the big groups and

industry we need to educate consumers about the

in any event we had some restraint placed on us

importance of good sleep,” she continues. “Without

from Steinhoff. But we were perfectly happy going

good sleep we cannot function properly. And this is

the independent route. We immediately started

where Simmons comes in offering an investment in

a process of extensive marketing and rapidly

quality sleep which equals quality health.”

achieved the brand recognition we were looking for.

“Buying cheap simply wont give you the quality

Simmons was, and is, a premium brand and that is

sleep that you need. We offer not just features and

how we marketed it,” explained Liz.

benefits – other brands make all kinds of claims

“Together Iqbal and I have built the brand,

for their features – but Simmons can actually offer

and since 2001 have seen it grow tremendously”,

hard documented proof. The inside of the bed (the

she said. “When I started with Simmons just 10

pocketed coil) is the motor that runs the bed, and

years ago, we had only six models. Today we have

when you get users coming back to you and stating

12, also in that same time span we successfully

that their bed is such a great product and how it

introduced our Majestic brand as a lower end

is helping their health, then you truly feel fulfilled

product. Although we’ve never really marketed it,

and happy.”

its grown and doing very nicely”, remarked Liz. All Simmons beds are customized. “Customers

So in her 10 years with Simmons, Liz Milne’s enthusiasm, talents and vast experience has

pay no premium for extra lengths,” she revealed.

paid off, as she has witnessed the brand grow

“And interestingly the volume of sales on extra

beyond all expectation. “We are now a substantial

lengths has increased substantially as South

countrywide organization with our support roots

Africans grow taller. Kings and queens are still our

deeply embedded with the independents. It was

biggest sellers and I doubt that will ever change.

a good career move on my part to join Iqbal and

However, we also offer singles, doubles and three

Simmons when I did, as I have enjoyed tremendous

quarters. Indeed some lodges we supply push two

satisfaction in helping grow this top premium

three-quarter beds together to make a super king

brand to the pre-eminent position it is in today,”

size bed.”

concluded Liz Milne.

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Ahmed Omar The success of Simmons – and it has

taught me much about Simmons and the

been a major success – has owed much

bedding industry globally,” he admitted.

to the vision and ability of founder Iqbal

“I certainly learned to my surprise that

Bam, but no company of this size and

our markets are pretty similar, the US

of such importance and dominance as a

market, the Caribbean and the South

supplier, can be so successful without the

African. If I have to characterise the

skills, personality, loyalty and energy of

differences between the American market

other dedicated people.

and ours, I would say that historically South Africans have gone for more

In Simmons’ case, that is first and

simple beds. Although in recent times

foremost Ahmed Omar, who carries the

we have been noticing a shift towards

onerous responsibility for driving sales and marketing. We spoke to Ahmed to find out a little more about him and his role. Born and schooled in Durban, Ahmed initially

‘exotic’ products.” “In America,” continued Ahmed, “to sell a product successfully, it must boast a feature or features which

studied law at Howard College in KwaZulu Natal. Said

set it apart from its competitors. The Americans

Ahmed: “After completion in 2006, I spoke to Iqbal

would call it a ‘unique selling proposition’ or USP.

and joined his then Loungefurn Group of Companies.

That is very important and we try as far as possible

He started me as an accounts clerk. That was in 1997

to incorporate something of that over here, although

and the factories were all in Isithebe in those days.”

local price points remain lower than those in the US.”

Since then Ahmed has been put through the mill in

By 2006 Ahmed Omar returned to South Africa.

order to learn the business thoroughly. “From being

He explained: “Although I toyed with the idea of

an accounts clerk I became a storeman, then store

staying on, I decided to return to South Africa. I was

manager and I also helped out as best I could in

married and for a host of personal reasons decided

various departments.” However, when Iqbal sold out

this was where I wanted to be.” On his return, he

to Steinhoff and moved Simmons to Stanger in 1999,

was welcomed back by Iqbal Bam, but now of course

Ahmed was appointed to run production and planning.

armed with his new intelligence and experience, he

“That was a steep learning curve,” he emphasised,

was charged with increasing market share.

“but I enjoyed it thoroughly and got to know so much about the business. Nevertheless and despite his growing reliance

“I was put in charge of sales and marketing, and that remains my core focus,” he said. “Iqbal has done extremely well in penetrating the independent

on his nephew, Iqbal decided to send Ahmed to

bedding retailers where we enjoy high visibility and

Simmons in the Caribbean in 2002. “The idea,”

support. We don’t supply the chains and groups and

explained Ahmed, “was for me to be exposed to the

concentrate on the bedding specialists. And that has

international culture of Simmons. So off I went and

proven very successful for Simmons. So I am now

was initially based in Guyana on the South American

concentrating on building up our contracts business,

mainland. I spent 18 months there before moving to

especially in the hospitality market.”

Jamaica. “I was in Jamaica for three years and then

Simmons has set up a separate division attending to its growing contracts business – and has agents

transferred to Trinidad where I spent my final 10

and distribution centres throughout the country

months.” He admits to learning a great deal about the

attending to the needs of the retailers whom they

hospitality industry in those few years. “Especially

service. “We have very specialised sales staff whose

in Jamaica where there was an emphasis on the

product knowledge is exceptional. We have a large

hospitality side of the business. I also travelled

product range today and cater for almost every

several times to Simmons head office in Atlanta

market segment,” declared Ahmed, “so you can

mixing with their executives and interacting with

imagine how important it is for our sales staff to be

Simmons representatives from other parts of

totally familiar with every aspect of the products

the world.”

we make.”

“That was a very broadening experience and

page 14 ►

Some of the quality lounge suites from TechnoLounge

Shumaiz Hashim TechnoLounge is Iqbal

were using very inferior

Bam’s wholly owned lounge

materials.” He decided

furniture factory, which he

there was nothing they

operates at complete arm’s

could do. “I wasn’t going

length from his bedding

to compromise on quality

interests. Although

and chase sales via lower

situated in Stanger,

prices. That is not the

TechnoLounge is a self-

business that TechnoLounge

sufficient operation set

is in. “We simply informed

well apart from the main

customers that we were

Simmons plant with its own transport, labour force, sales and management. It was started by Iqbal Bam in 2001 and today is

not going to compete with these people on price. We have a definite pride in our product and we also

run by Indian born Shumaiz Hashim. He explained:

offer outstanding after sales service. Indeed,” stated

“I initially arrived here from India to set up a coir

Shumaiz, “we have very few returns. That means a

mattress manufacturing plant. For many reasons this

lot to customers. And because we took this stand

did not work out and when Iqbal suggested that I take

and proved it by our quality and service, we have

over the running of TechnoLounge I jumped at the

been growing. In the last three or four years we

opportunity. In India I managed several furniture and

have enjoyed increasing customer support which has

bedding factories, so this was nothing new for me.”

wholly justified our attitude.”

“I simply viewed it as a massive challenge as I

Shumaiz Hashim describes the TechnoLounge

was now operating in a totally new environment.

ranges as consisting of lounge suites, couches,

Of course, Iqbal gave me a lot of support and help

occasional chairs, sleeper couches and corner

initially until I found my feet. Today I can truthfully

suites. “We say that this is where quality and style

say I am managing this business as well as any South

meet,” he confides. “Depending on his target market

African born manufacturer could.”

the retailer can choose his fabrics, his colours and

He continued: “TechnoLounge manufactures lounges suites for the volume market and up to the middle priced sectors. Our products sell from between R3000 up to R7000, so you can see we

his styles, and in this way he is certain that he has something for everyone.” “We supply throughout South Africa and neighbouring countries, and have a network of agents to ensure

are in a very competitive area of the market. At the

that customers are always kept in the loop. We guar-

beginning,” said Shumaiz, “I discovered that our

antee value for money and although we may from

pricing was not right, we were undercharging. Our

time to time increase our prices when costs go up,

products are well engineered and we use quality

that is done to ensure consistent quality. Our plant

materials but we were not doing our sums properly.”

was recently upgraded as we had bad flood damage

“We have now sorted that discrepancy out. But obviously there were customers who complained, who were unhappy about the new prices, but once

some months back and that has ensured that our quality is not only maintained, but also improved.” Hashim has a labour force of 130 but emphasizes

we explained, most of them understood. To make

that everything else is done by him. “The only thing

a convincing case we offered samples to these

we don’t do here are the accounts – that is handled at

customers requesting they try to sell them at the

the Simmons head office. Otherwise everything else

new prices. And of course they had no problem

is done here including all procurement and buying.

selling them as they were excellent products. So that

Oh, and I am also importing coir from India now.”

convinced them,” declared Hashim. “As we adjusted our prices upwards, we found that

Shumaiz Hashim is the classic example of a man who when one door closes, steps nimbly through

many of our so called competitors were offering our

another partially open one, and by dint of hard work

copy cat designs but at much cheaper prices. They

forces it even wider open.

◄

page 11 | Ahmed Omar Ahmed has already successfully

concluded ‘exclusivity’ agreements with groups such as Southern Sun, Sun International, Starwood, Radisson and Hyatt to name a few. “One of the secrets of our success,” he revealed, “is the fact that we can offer a customised bedding service. Obviously the Simmons brand and quality is paramount but our manufacture of customised sizes is very appealing. Extra widths or extra lengths we can do anything required and that is very appealing to these hospitality groups.” He himself travels regularly throughout the country calling on customers and prospective customers. “Although our biggest market is in Gauteng, we do sell throughout the country, and we know how critical it is to keep in touch,” he explains. “This business has been built on people and personal relationships and Iqbal has developed those brilliantly over the years. He is extremely well known and is without doubt the face of Simmons.” “Another factor to our success is our after sales service,” he declared. “More than ever, because times are so tough, the quality of service has to be the best. All service queries are handled here in Stanger by us.” He defines 2009 as a “year of challenges. No one can deny it has been extremely flat”. He also cites the various international sports events that have been held here this year as having had a negative impact on sales in the contracts division. “We’ve been fortunate to avoid retrenchments and downsizing, and we’re definitely very positive and optimistic about 2010, especially as we normally have an excellent start to the year, and then the World Cup activities should kick in and hopefully boost business for everybody,” was Ahmed’s upbeat conclusion.

Shop Talk

Coricraf t customers’ in‑store experience enhanced through strategic design To bring its newly opened stores in Johannesburg, Cape Town and Rustenburg in line with the international trends to which Coricraft furniture is designed, manufactured and sourced, the retailer appointed Design Partnership to develop a sleek new image for its stores. “We want our customers to relate to the in‑store experience while simultaneously being exposed to the same unbeatable value in an environment that is in a class of its own,” says Coricraft director Dave Jacobson. Design Partnership’s brief was to align the store environment with the overall business and communication strategy that differentiates Coricraft from other retailers in the market. To interpret this director Adrian Morris acquired a thorough understanding of how the company’s business model functions, from manufacturing to concluding sales on the store floor. Drawing inspiration from Coricraft as a business and brand Morris created a design that reflects the Coricraft business phi‑ losophy as well as the manufacturing environment at the factory. “A key element in the strategy behind the design of any retail environment is that the end product must drive up the bottom line,” he explains. “A ‘new look’ can achieve this, but is often not sustainable on its own. To be sustainable sales devices need to be incorporated into the design. In the case of Coricraft, one such device that has proven incredibly successful is the leather wall, a tool for both the sales staff and customers. This end product is also an example of our strategic approach to design, which we call ‘Ideanomics’.” “An inviting retail environment is achieved through creating a pattern interrupt,” Morris continues. “When most furniture retailers’ design environments reflect how the end product is used – in the customer’s home – the Coricraft stores reflect the manufacturing environment, reinforcing the fact that the customer is buying direct from the manufacturer, while also clarifying the quality of the product and integrating the customer into the manufacturing process through devices such as the leather wall.” Despite tight budget constraints Design Partnership suc‑ ceeded in delivering on the design vision with an end product

Design Partnership created a design that reflects the Coricraft business philosophy and the manufacturing environment at the factory.

Adrian Morris: “The end product must drive up the bottom line.”

Dave Jacobson: “More customers are coming into the stores.”

that addresses Coricraft’s unique positioning in the South African furniture market as the only real furniture ‘manu‑tailer’. Jacobson says the fact that the new and revamped stores are performing well above expectation is proof that more customers are coming into the stores. “The most encouraging aspect is the extent of the positive customer feedback on the overall shopping experience, which has already translated into increased sales,” he says. “The volumes in new and revamped stores are testimony to the fact that the in‑store experience is a key driver in converting marginal customers to commit to a purchase. “Additionally, the overall credibility lent to store staff and managers plays an important role in motivating staff in new and revamped stores to lift their game to the next level.” Phase two of Coricraft’s new store and revamp project will focus on creating an even better shopping experience for its customers. “Information and access to real‑time useful product information will be a key focus,” says Jacobson. “At the end of the day we are committed to making the in‑store experience as good as it can possibly be.” Home Goods Retailer – December 2009 – January 2010

Shop Talk

To rent or not to rent, liability is the question Of all the reasons companies give for running illegal software, the most common is that the notebooks and desktops they use are not owned by them but rented from a third‑party vendor. So what are the software licensing facts when renting? Business Software Alliance South Africa committee chairman Alastair de Wet explains… Firstly, it is important to understand where the responsibility for software man‑ agement rests and what to consider when entering into a rental agreement, he says. “Whether software is pre‑installed on the rental hardware or not, business owners must closely inspect the terms of the agreement to protect their company and ensure that the software is legal. Not owning the equipment does not usually mean the liability resides with the rental company, but more often than not with the company renting the software. Organisations should also have a clear employee policy on downloading software, owing to the risks of using unauthorised versions.” Apart from legal risks, which could result in a financial penalty of up to R5000 per illegal copy of the software installed and/or time in jail, De Wet says companies also expose themselves to unnecessary operational or reputational

risks such as data loss, viruses and malicious code corrupting files or systems, as well as potential reputational damage. Additionally, the software is not entitled to the same support, services or upgrades as licensed versions, which can impact productivity. So, how do you protect your company? Companies considering hiring computer equipment need to carefully read and understand the terms and conditions of their rental agreement, says De Wet. “Especially read all the fine print, ensuring that legal software licences are in place. If the agreement is unclear, obtain clarity before signing on the dotted line. “More importantly, consider in whose name the software will be licensed and store all licences carefully to avoid software licensing pitfalls.” De Wet lists three steps every company should follow, regardless of whether the computer equipment they use is rented or not: 1. Read and understand the terms of any agreement governing the software being used. 2. For companies renting equipment, ensure that the software on the rented computer matches the software listed in the rental agreement.

Alastair de Wet: eliminating software piracy. 3. Remember that software is an asset that needs to be managed properly. Ensure that regular software audits are conducted so that you are aware of what you have, how it is being used, and if you need to purchase more licences to remain compliant. There is no excuse for running illegal soft‑ ware, declares De Wet. “While legislation is provided to govern intellectual property rights, and organisations such as the Busi‑ ness Software Alliance are working hard to eliminate piracy, it is also up to manage‑ ment and businesses to ensure they are legal and have clear policies in place to help guard against software piracy.”

How to use wasted retail space effectively

Scan Display’s retail merchandising unit transforms dead retail space into income‑generating areas. Around 30 per cent of retail space in South African shopping centres is wasted, according to Scan Display managing director Justin Hawes. “While we believe South Africa shopping centres can and do compete 14

on a global level, most still have large areas of untapped retail space, for example, in passageways and dead areas,” he says. “These areas can be transformed into income‑generating retail space through the placement of free‑standing merchandising units.” With this in mind, and in collaboration with sddRETAIL, Scan Display has added the retail merchandising unit (RMU) to its product range. “These units create significant additional income for shopping centres and because they can be custom

Home Goods Retailer – December 2009 – January 2010

designed to fit in with the look‑and‑ feel of any centre, they enhance the overall shopping experience,” says Hawes. “They are also ideal for smaller traders who do not need large retail spaces.” The RMU is manufactured and marketed locally by Scan Display under licence from international industrial design company SddRETAIL UK. SddRETAIL UK operates worldwide and has won numerous international awards for design excellence. Hawes says the partnership offers South African retailers international design and expertise at local manufacturing prices. “Our policy is to also use locally sourced materials where possible,” he adds.

Shop Talk

Reduce shrinkage with network video

Theft and inventory shrinkage are obvious causes of lost profit and they are traditionally fought with surveillance systems or security guards. Network video solutions take this fight to a level far beyond what the market has become accustomed to, says Axis Communications country manager Roy Alves.

Whether it is in a single shop or a whole chain of malls, network video makes a noticeable improvement to the bottom line. The introduction of network video has revolutionised the way retail professionals work with loss prevention, store optimisation, fraud detection, security and customer service. Overall, network video provides a whole new set of tools to reach operational excellence.

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page 12 | Retail solutions

TDC has developed a series of tools that enables it to evaluate the state of play in any retail business. “Two of the most important for existing brands are the visual audit and cost audit,” says Patrick. A visual audit is all about looking at the shop from a consumers’ point of view. “We look at what the brand is doing, where it is positioned, what it stands for, and who it is servicing,” says Olivier. “We don’t do typical market research – that is a two dimensional approach. Our visual audits are three dimensional. And at the end of the process, we define the strategic positioning for that brand, changing it where necessary.” A cost audit involves looking at the way the company is run, how much each aspect costs and how it all fits together. “It is true value engineering,” says Knutsen.

“Installing surveillance cameras and informing your customers about it goes a long way in reducing theft,” says Alves. “The giant leap, however, comes with the introduction of network video, which brings several additional benefits.” These include: • Revenue increase – network video helps to improve staff planning, store layout and in‑store advertising by monitoring the high‑traffic areas in the store. It is also a highly efficient loss prevention tool. • Fast ROI – reduced loss, less time spent on investigating suspect incidents, decrease in liability claims, enhanced marketing and optimised staffing all result in a compelling return on investment. • Seamless integration – network video solutions run on standard Ethernet networks and are compatible with almost all existing in‑store infrastructure. • Future proof – network video solutions are based on open standards, providing maximum flexibility when choosing surrounding equipment. The solutions are fully scalable and allow store owners to take advantage of the latest technologies and features. “Because there is the human element involved in store surveillance, there will be times when security breaches do occur,”

Alves points out. “When this happens and evidence has to be sought from the saved files, the built‑in intelligence of network video surveillance systems becomes invaluable as it allows one to quickly and easily scan through hours of stored footage by logging a date and time search. “In addition, because all data can be saved on a central server, this enables efficient investigation from any Internet‑connected PC or viewing device.”

“The result of a cost audit can be as much as a ten to 15 per cent capex saving without changing the look‑and‑feel of the store. A real example shows that a 15 per cent capex saving, of which 40 per cent is attributed to energy conservation, in turn underlines the company’s sustainability strategy. Both the visual and cost audit are built in when we offer an end‑to‑end turnkey solution, but we also have the flexibility to be able to offer them as separate services.” TDC’s emphasis on cost has huge benefits for the client and the environment. “We work on an open book policy with our clients,” Patrick explains. “We practise good corporate governance, which means no handouts or kickbacks, just a strong buying power that gets the best deal for all the clients on our books. Because we work as one team, we look at the whole process. For example, our designers are aware of the cost

issues, so they may design units that can be flat‑packed. That means fewer delivery trucks when we roll out the stores, which saves money for the client and is good for the environment.” In the 16 years that TDC has been in business it has gone through several economic downturns but has grown every time. Patrick attributes this trend to the company’s non‑negotiables: integrity, honesty and never assuming that they are at the top of their game. “We are always striving, choosing to be better than we currently are. As we have matured as a business to become one of the largest retail design group in the country, it is these non‑negotiables that have helped us to stay focussed. Our forward thinking is taking us into the shopping centre and hospitality industry, which is a huge growth market.”

“store owners always stay

one step ahead in preventing internal loss

”

Detecting and curbing cashier‑related shrinkage is just as simple with network video surveillance, he continues. “Instead of having to look through hours of video when analysing shrink‑related transac‑ tions, network video surveillance systems provide detailed exception reports, where each transaction is linked with correspond‑ ing high‑quality video, making it easy to identify common mistakes, misunderstand‑ ings and the manipulation of point‑of‑sale (POS) systems. “POS exception statistics from single or multiple stores can also be used to detect suspect patterns and behaviour. This ensures that store owners always stay one step ahead in preventing internal loss.”

Home Goods Retailer – December 2009 – January 2010

Product Showcase

Elegant outdoor lighting

The attractive Lorena outdoor floor lamp has an antique brown finish and a basket weave look, ideal for decorating terraces, patios and gardens.

The globe‑shaped Ferroterra decorative garden lamp features an unusual, yet striking metal ring design and comes in a black/silver or clear silver finish.

The days when sufficient outdoor lighting was considered a few security lights and perhaps a lit‑up pathway are long gone. Today’s homeowners want to maximise their gardens and create total synergy between inside and outside spaces. ‘Garden living’, as this trend has been dubbed, is fast growing in popularity, calling for a fresh approach to outdoor décor and lighting in particular. The new ranges of contemporary EGLO outdoor light fittings from Eurolux, sole South African importer and distributor of the range, allow homeowners to effectively extend their living room into the garden. “These are outdoor lamps featuring unique designs in weather proof materials,” says Eurolux marketing manager Eben Kruger. With the main focus of the range being on floor lamps, he adds: “At first it might sound unusual to put a floor lamp in a garden or on a patio, but the right lamp can truly complement and enhance an outdoor space, and this EGLO range includes something for all tastes.” The elegant and striking design of the Lorena outdoor floor

The Rocker features a similar design to the Ferroterra but is a wall lamp that is available in either an aluminium or rust finish.

EGLO’s Progressive low‑energy outdoor cube floor lamp comes with a red, blue and green cup to place over the bulb, thus creating different lighting effects.

lamp can hold its own in gardens of any shape and size, or become an attractive feature on a patio, while being able to weather the elements. The Ferroterra decorative garden lamp features a sturdy design that can survive the rough and tumble of an active household, including accidental knocks by dogs or children. The Art Deco Progressive lamp has a silver/white finish and works best in uncluttered spaces where its striking design can attract the attention it deserves. Kruger says many homeowners believe that they must have a large porch or terrace before going to the expense of fitting outdoor lamps. “But any garden or outdoor space can become an impressive entertainment area if an outdoor wall lamp such as the Rocker is fitted.” “EGLO lamps are not merely functional lights, but artistic pieces in their own right,” he continues. “Within homes, floor lamps have long been vital décor items adding flair and ambiance to a room, so why should outdoor lamps be any different?”

Sahara computers now with Windows 7 The latest range of desktop and laptop computers from information communications and digital life style technology supplier Sahara Computers are ready with Windows 7 and deliver fast, easy and spontaneous computing for home, office, education and business use. Windows 7 is designed to simplify everyday tasks and makes new things happen instantly. Live taskbar previews, fewer clicks, easy to connect, efficient search module, less power consumption, new touch screen feature, free internet TV option, improved memory commands and connecting to the available networks are some of the key features of Windows 7. Sahara’s latest range gives the customer the choice of configuring their computer systems with Windows 7 Home Premium, Professional or Ultimate depending on their specific application needs. 16

Home Goods Retailer – December 2009 – January 2010

Windows 7 is intended to give notebooks longer battery life, utilises less additional memory and runs on less powerful machines than Vista. Upgrading a PC is also made simpler with Windows 7 and it runs even better than a PC installed with Vista or XP. All hardware is installed correctly the first time and no additional drivers are needed to get the computer up and running. Microsoft’s popular programs such as Office, Outlook and Excel work more efficiently with Windows 7. Sahara’s new PC range with Windows 7 delivers the highestquality operating system and offers faster boot time and advanced networking, leading towards greater benefits to its end users. All Sahara desktops and laptop computers will be pre‑installed with Windows Live essentials, giving access to Microsoft services including MSN, Photo Gallery, Movie maker, family safety, sky drive, online personal storage and live mail for complete the entertainment.

Product Showcase

The Philips Blu‑ray disc player brings true cinema experience into the living room. The Philips Blu‑ray disc player allows users to enjoy the thrill of full high‑definition videos with five times more details than they have ever seen before. They can also get the most of their existing DVDs with HDMI 1080p upscaling, and go beyond the movies to explore bonus features online with BD‑live. Blu‑ray discs have the capacity to carry high‑definition data, along with pictures in the 1920x1080 resolution that defines full high‑definition images. Scenes come to life as details leap at the viewer, movements smoothen and images turn crystal clear. Blu‑ray also delivers uncompressed surround sound to make the audio experience unbelievably real. The high

Experience the world of Blu‑ray

storage capacity of Blu‑ray discs allow a host of interactive possibilities to be built in. Seamless navigation during playback and other exciting features like pop‑up menus bring a whole new dimension to home entertainment. Additionally, DivX Ultra combines DivX playback with great features like integrated sub‑titles, multiple audio languages, multiple tracks and menus into one convenient file format. BD‑Live opens up the world of high‑definition even further. Up‑to‑date content can be received by connecting the Blu‑ray disc player to the Internet, where exciting new things such as exclusive downloadable content, live events, live chats, gaming and online shopping await the user.

DVD video upscaling HDMI 1080p upscaling delivers images that are crystal clear. DVD movies in standard definition can now be enjoyed in high definition resolution – ensuring more details and more true‑to‑life pictures. Additionally, progressive scan (represented by ‘p’ in 1080p) eliminates the line structure prevalent on TV screens, again ensuring relentlessly sharp images. To top it off, HDMI makes a direct digital connection that can carry uncompressed digital HD video as well as digital multi-channel audio, without conversions to analog – delivering perfect picture and sound quality, completely free from noise.

In-car navigation made easier with Garmin nüvi 1000 series Garmin’s new range of automotive GPS for the local market boast new design features and functionality that will make automotive in-car navigation even easier and more convenient for motorists to use. Additionally, says Avnic Trading sales and marketing director Walter Mech, the new units are 25 per cent slimmer than previous models and offer bright sunlightreadable screens and text-to-speech voice navigation for every turn. “This will not only tell users to ‘turn right’ but also add the street name they’ll be turning into, for example, ‘In 100 metres, turn right into Main Road’,” Mech explains. The revamped user interface and operating system on the new nüvi series make utilising these devices even easier than before. With a new touch-and-slide menu option, users can now navigate menu options in a very similar manner to navigating a touch-screen phone, by

The Garmin nüvi 1200 is the entry-level automotive device featuring a 3.5-inch touch screen. The nüvi 1300 and 1310 are the mid-range devices and feature a wide 4.3-inch screen, while the nüvi 1410 tops the range, featuring a massive five-inch touch screen and Bluetooth connectivity. dragging a finger across the screen to scroll up and down or left and right. “Garmin has also given users the ability to add additional information to the map data layout in wide screen models, such as elevation, estimated time of arrival and distance to destination,” Mech points out. Branded Points of Interest (POIs) mean that it is now easier for users to identify restaurants, hotels, shops and petrol stations on the map, and the introduction of photo navigation means that users can download geo-tagged photographs to their compatible nüvi device and navigate by selecting a photograph as opposed to

entering a POI name or address. Garmin ecoRoute, which was previously only available on a limited number of nüvi devices, is now standard across the nüvi 1000 series and gives users the ability to measure their car’s carbon footprint and fuel efficiency, thereby giving them the choice to be more eco-friendly. ecoRoute also gives users a “less fuel” option, allowing them to navigate to a destination with greatest fuel efficiency, as well as providing detailed petrol usage reports that can easily be downloaded in Microsoft Excel format and incorporated into log books for tax purposes.

Home Goods Retailer – December 2009 – January 2010

Market Review

GfK TEMAX SA Q3 2009

No recovery yet for technical consumer The South African market for technical consumer goods showed no signs of recovery in the third quarter of 2009. Despite an overall stable development in comparison to the third quarter of 2008, several segments showed a steep downturn. While the biggest upturns were recorded in mobile phones and small domestic appliances, the markets for IT products continued to develop positively. Consumer electronics showed a significant downturn while major domestic appliances stabilised on a lower level.

The overall market for electrical goods monitored by GfK TEMAX amounted to ZAR 7.1 billion in the third quarter of 2009, which represents a downturn of one per cent from the same period of the previous year. Despite this almost stable development some segments are still showing a steep decrease. While the segment of office equipment and consumables declined by 2.1 per cent, IT grew by 2.4 per cent. The telecoms sector showed a very healthy growth of eight per cent. Small domestic appliances developed positively, rising 10.4 per cent, but major domestic appliances fell by a rather moderate one per cent. In the photography market sales declined by 7.5 per cent, while consumer electronics was even more negative with a decline of 10.6 per cent.

SDAs: positive market development With an increase of 10.4 per cent the market for small domestic appliances continues to show a very good performance. Again these categories remain immune to the general slowdown of the markets. Food‑related products such as beverage makers, slicers and kettles performed particularly well.

Washing machines perform best Major domestic appliances (MDA) continued their downward trend with a decline of one per cent in comparison to the third quarter of 2008. Relief is not expected any time soon. In fact, over

Home Goods Retailer – December 2009 – January 2010

the last two years the MDA market has shrunk by a staggering 25 per cent across all channels of distribution. Of all the major categories washing machines performed best with a growth of 8.6 per cent in the third quarter of 2009 compared to the same time last year. Refrigerators and cookers were stable, while tumble dryers and dishwashers continued their downward trend.

Netbooks a main IT growth driver The information technology (IT ) sector, with a volume of more than ZAR0.7 billion in the third quarter of 2009 in retail, was up by 2.4 per cent compared to the same period last year. With a share of more than 70 per cent of the total IT sales in retail, notebooks recorded more than two per cent growth while the demand for monitors was down by one per cent compared to the third quarter of 2008. It is expected that within the PC segment the trend towards notebooks will continue. The fastest growing segment within notebooks was netbooks with a share of more than 12 per cent of the total notebook segment in the third quarter of 2009.

Consumer electronics decline In the third quarter of 2009 the market for consumer electronics generated more than ZAR1.9 billion in sales, down by 10.6 per cent in comparison to the third quarter of 2008. The main driver within consumer electronics remained LCD TVs, which account for more than 30 per cent of the total consumer electronics market. Sales of LCD TVs were about 20 per cent above last year’s level with full‑HD panels a major driver of this segment. Many consumers are in the process of switching to high definition LCDs and more affordable prices are supporting the market. In particular, sets with large screens (40‑inch and above) and cheaper 32‑inch sets are selling well. As prices for LCD TVs have become more affordable this trend is expected to continue, especially with the 2010 Soccer World Cup imminent. The market for hi fi products such as home cinema systems, micro, mini and midi systems, which dropped significantly after the implementation of the National Credit Act in the second half of 2007, dropped by more than 11 per cent compared to the third quarter of 2008. Contrarily, the market for DVD players and recorders was up by 7.2 per cent. This trend was mainly driven by increasing average prices as the demand for blu‑ray players increased nicely. The figures for portable media players fell by 21.4 per cent while the turnover with portable navigation devices decreased by

Market Review

goods market 11 ZAR bn

9.30

8.61

TC MDA

7.28

7.62

7.03

7.14

7.09 6.95 PH

5 4

Turnover Share

7.59

7.40

7.09

Q1-07

Q2-07

Q3-07

Q4-07

Q1-08

Q2-08

Q3-08

Q4-08

Q1-09

Q2-09

Q3-09

SDA OE

Change compared to same quarter of previous year

Market Volume in bn. ZAR

Turnover development of technical consumer goods in South Africa.

Market volume, turnover share, growth rate compared to previous year.

34.4 per cent. This steep decrease in turnover can be attributed to decreasing prices as well as decreasing sales units. While the decline of 31.9 per cent for CRT‑TVs in comparison to last year’s third quarter was expected, the decline of 19.1 per cent for camcorders came as rather a surprise. Despite many new models with flash memory technology this product group doesn’t seem to be too attractive to consumers with a stretched budget.

2009. While the comparatively small market for fixed line phones decreased by 18 per cent in comparison to the third quarter of 2008, the market for mobiles developed positively with an in‑ crease of nine per cent. Nevertheless, the third quarter 2009 saw the implementation of the new RICA regulation in August which resulted in an unusual drop in sales in the last two months of the third quarter. In particular, the entry‑level customer struggles to obtain all the information required to purchase a handset and SIM card. Beyond mobile phones it is the high‑end segment which continues to push the market, with smart phones doubling to last year while prices are starting to reach prepaid affordability. In this case it is the keyboard or touch screen feature that has reached the trendy mid‑tier market. After eyeing these phones at the top end of contract phones customers have been waiting for affordable “smart” phones with the looks of the top tier market. Although in most cases features such as 3G or GPS were sacrificed and strictly these models do not qualify as smart phones, their features (the QWERTY keyboard in particular) resonate with local consumers. Until the first quarter of 2009 the South African markets for consumer goods seemed to be unaffected by the global financial crisis. In the second quarter of 2009 a significant downturn was recorded, which continued into the third quarter. Fortunately, South Africa was late in succumbing to global recession. Currently increasing unemployment is putting pressure on the retail sector with decreasing interest rates bringing only little relief. The troubled state of domestic consumers could delay a revival of the country’s retail sector.

Laser toners in demand Office equipment and consumables showed a year‑on‑year decline of 2.1 per cent, reaching a value of ZAR305 million in the third quarter of 2009. This growth was caused by the 5.8 per cent increase in sales of printer cartridges and toners, while the sales of printing devices (standalone printers and multifunctional devices) decreased by almost ten per cent. The main drivers within the printer cartridges/toners sector were the toners for laser printers which grew by almost six per cent. The success of laser printers is reflecting the market for consumables now.

Compact and digital SLR negative After a very good year in 2008 and a promising start in 2009 the market for photographic products slowed down in the third quarter 2009, ending 7.5 per cent below 2008. Digital compact cameras fell by 9.2 per cent while the turnover with digital SLR cameras was down 3.9 per cent.

Telecommunications under pressure With an increase of eight per cent the market for telecommu‑ nication products continueed to grow across the third quarter

Home Goods Retailer – December 2009 – January 2010

Trade Shows

Hong Kong the value‑for‑money gateway to Asia Hong Kong trade fairs may not be as big as, for example, their Canton counterpart, but says Hong Kong Trade Development Council regional manager Conrad Hendry, “our fairs are about quality not quantity. They are well organised, provide value‑added services such as business matching for exhibitors and buyers, and are targeted at specific sectors.” Internationally acknowledged as the business centre of Asia, Hong Kong offers easy access to Japan, Korea, the Philippines, China and India. “For South African exhibitors in particular, Hong Kong is integral to gaining access to Chinese importers, especially the burgeoning middle class in that country, which currently is about 200 million people, far bigger than the entire African continent’s population.” The HKTDC’s housewares and electronics fairs, for example, showcase goods for every part of the home, from furniture to flooring and lighting. “Consequently, there are huge opportunities for South African retailers,” says Hendry. “In fact, major South African suppliers and retailers such as Game, Amalgamated Appliances, Ellies and Hi Fi Corporation regularly send buyers to the electronics and housewares fairs.” While the furniture fair may be small, Hendry says this should not put off potential buyers. “A vast array of furniture from Malaysia, India and other Asian regions is exhibited and buyers looking for good quality, reasonably priced furniture are sure to find numerous opportunities at this fair. Again, major retail stores attend these fairs because they know South African producers cannot produce the level of quality exhibited at such affordable prices.”

Exhibitions essential in an economic downturn It’s a common reaction to trim marketing, advertising and trade show budgets during a downturn in the economy, but how will potential customers learn about your products and services that fit their needs? They won’t. That’s why maintaining a presence in advertising and trade shows is critical to a company’s growth and success. Many companies utilise an economic downturn to their advantage. While their competition is cutting marketing expenses, many utilise their sales team and advertising and trade show rands to gain market share by increasing visibility and establishing their stability with current and potential clients. The top reason for exhibitors to take part in a trade show is that it is the most efficient way to make multiple customer contacts in a short time. A study conducted by New York‑based corporate turnaround firm Getzler & Co showed that most organistions experiencing a downturn in cash flow are better off reducing operating costs rather than cutting sales and marketing budgets. According to further research, 88 per cent of decision‑makers agree that shows help them decide which products or services to purchase by bringing many vendors under one roof at the same time. Trade shows provide a look at state‑of‑the‑art equipment under one roof. Attendance numbers might decline but research indicates that this creates an even more favourable marketing opportunity for remaining exhibitors. During economic downturns, show attendees are a more fo‑ cused group of individuals. They are the key individuals, the ones who make the buying decisions. Companies usually only send one or two people to a show instead of five or six. Those who are sent carry the responsibility to scout out and compare products and services that will enhance their company’s productivity.

MIFF opens up a new avenue for the ID sector MIFF 2010 returns for its 16th year from 2-6 March in Kuala Lumpur. Taking place over three venues – the Kuala Lumpur Convention Centre (KLCC), Putra World Trade Centre (PWTC) and MATRADE Exhibition and Convention Centre (MECC), the fair is bound to attract furniture buyers who are looking for three things: quality, style and a reasonable price. Over the years, MIFF (Malaysian International Furniture Fair) has identified itself as a one-stop buying centre where East meets West, providing products that cater to the needs of buyers worldwide. Plenty of returning and new buyers eagerly make their way to Malaysia in the first week of March to see the latest designs and innovation in the furniture world, which often results in sealed business deals happening at the fair. For 2010, MIFF is branching out with a new exhibition entitled ID Trends which will be held at the MATRADE Exhibition and Con‑ vention Centre. This is in line with MIFF’s aim to reach out to local 20

Home Goods Retailer – December 2009 – January 2010

consumers by offering them an accessible platform where inte‑ rior designers and contract manufacturers are located in one spot to offer consumers advice and answers to their lifestyle needs. One of the highlights of ID Trends is booths set up for interior designers as a platform for them to offer consultation to visitors. With this, participating interior designers will be able to garner more business and build up their image in the industry. Because ID Trends is held during the same duration as MIFF 2010, partici‑ pants will also be able to build their network all across the region. ID Trends will feature booths that reflect conceptual designs and will offer furniture and furnishings. Expect products for the home and office under one roof, plus lifestyle solutions that cater to consumers’ demands and needs. Furniture manufacturers, exporters and interior designers who are interested in participating in MIFF 2010 and in ID Trends can visit www.miff.com.my for more details on space booking.

Gallery

Putting on a poker face Male grooming supplier Philips recently launched its latest collection of electric shavers at an exclusive poker evening at Movida in Rivonia. Achieving that perfect poker face allowed Philips to illustrate the benefits of its new male shaving range.

Leonard Scholz of Stax was crowned poker king of the evening.

Samsung provides food courses for fine causes In support of Operation Bobbi Bear Charities and COPES‑SA Samsung consumer electronics sponsored an evening of fine dining where five celebrity chefs cooked five courses for these fine causes. Samsung’s digital appliance division paid for all invitee tickets valued at R1000 per head. The total proceeds of the evening – R90 000 – was given to the aforementioned charities. Samsung’s digital appliance division partnered with Gourmet SA owing to its sponsorship of the Chefs in Action Theatre at the Good Food and Wine Expo, which took place in October at The Palazzo Hotel, Monte Casino. Chefs involved in preparing the five courses included the BBC’S Ainsley Harriot and Valentine Warner, Caribbean cuisine devotee Patrick William, UKTV Food’s Reza Mahammad and Katie and Giancarlo Caldesi who run a cookery school in London and Bray, home to the famous Michelin‑starred Fat Duck. Samsung’s digital appliance division also donated a range of products to the COPES‑SA Charity and Operation Bobbi Bear. Additionally, Samsung product marketing teams visited the COPE SA Clinic in Soweto to lighten, brighten and uplift the premises with a new lick of paint and some tender loving care. COPES‑SA is a community‑based non‑profit organisation in Soweto which focuses primarily on the prevention of child abuse and neglect. Operation Bobbi Bear Charities’ mission statement is to rescue and uphold the rights of sexually abused children, minimising the risk of HIV infection and assisting them to reach wholeness again. Both charities are critical in the growth and development of less privileged children into healthy adults in South Africa. Entertainment for the evening included brother and sister team Lana English and Victor Siljeur, who sang well known compositions from Puccini to Verdi, Andrew Lloyd Webber, and songs made famous by Sarah Brightman, Josh Groban, Boccelli, Pavarotti and others.

Mr and Mrs Scholtz (left and second from left) of Stax with Mr and Mrs Viljoen of Philips.

Adrianne Scheffers‑Westerink (left) with Stephen Hammond and Jasper Westerink, both from Philips. 22

Home Goods Retailer – December 2009 – January 2010

Celebrity chef Ainsley Harriot with Samsung’s Mr and Mrs Lee.

Gallery

South African cook ing duo take the crown in international championship Team South Africa Jaco Pieter Willem Dreyer and Evgeni Igorevich Omeltchenko took home the title of LG Global Grand Master Chef at the LG Life Tastes Good Championship 2009. The team won the company’s second annual premier amateur culinary competition which took place recently at the Hyatt Erawan Hotel in Bangkok. The duo was crowned national South African and regional champions following competitions held across South Africa and Dubai. They then moved on to the global competition consisting of 16 teams of finalists from North America, Europe, Asia, Middle East and Africa. The finalists prepared and served recipes using organic ingredients and LG cooking appliances with health‑conscious and energy‑saving features. Judging was based on menu presentation, taste and relevance to the central theme, all criteria that have been reviewed by World As‑ sociation of Chefs’ Societies (WACS) and Le Cordon Bleu to increase the competi‑ tion’s objectiveness and professionalism. The winning team from South Africa impressed judges by taking full advantage of LG’s light wave technology. The team cooked a creative menu to accentuate the natural, healthy and rich flavours of each ingredient in the dish. “Now in its second year, this event of‑ fers a unique opportunity for home chefs to transcend both cultural and linguistic barriers,” says LG Electronics South Africa marketing director Dr Michelle Potgieter. “The competition was originally started to show how consumers can make tasty and healthy gourmet food at home, but it has become more about the wonderful diversity of cultures and the way in which we all relate to food in our lives.”

Philips launches affordable blu‑ray player

Brendon Auret, actor of Isidingo and Disrict 9 fame was the MC at the Philips blu‑ray event. He shared his personal experiences with blu‑ray technology on his latest movie and talked about how advances like blu‑ray influence the movie industry. LG cooking competition winners Jaco Dreyer and Evgeni Omeltchenko won the title for the second consecutive year. The theme for this year, Cuisine of Light, highlighted the benefits of cooking with light wave technology, which makes it possible for anyone to easily prepare high‑quality gourmet dishes at home. LG plans to sponsor the LG Life Tastes Good Championship every year with a different theme, consistent with the company’s commitment to providing better lifestyle solutions for consumers around the world. Last year’s theme, Eco‑Cuisine, highlighted tasty, healthy meals made with organic ingredients.

People on the move Nu-world

Amap

The board of directors of Nu-World has appointed Richard Kinross CA (SA) as an independent non-executive director.

Myron Cyril Berzack has been appointed as a non-executive director of Amalgamated Appliances.

Wendy and Max Madlner from What Hi‑Fi Sound and Vision with Bob Pryers from Audio Video SA. Over the years Philips has crafted a diverse range of innovative products, and today the company continues to invent technology and appliances that enrich the home entertainment experience. The latest of such innovations is the Philips Blu‑Ray player. Because Philips technology has to be experienced to be believed, an interactive event was recently held to launch Philips blu‑ray at the Turbine Hall in Newtown, Johannesburg. What sets this unit apart from the rest is that it is the first of its kind to sneak in with a price tag of under R2000.

Home Goods Retailer – December 2009 – January 2010

Features and Rates for 2010 Feature List February

April

June

• Small Domestic Appliances • Bedding

• Consumer Electronics • Domestic Heating • Lounge Furniture

• Green Feature • Cooking Appliances • Dishwashers

August

October

December–January

• Outdoor Furniture and Garden Equipment • Fridges and Freezers • Case Goods

• Domestic Cooling • Home Laundry • Floorcovering and Floor Care

• Trade Shows • Shop Talk

Rates Full colour

1 insertion

3 insertions (–15%)

6 insertions (–20%)

Type (mm)

Trim (mm) Bleed (mm)

H×W

OFC

R 31 548

R 26 816

R 25 238

265 × 180

297 × 210

303 × 216

OBC

R 21 000

R 17 850

R 16 800

265 × 180

297 × 210

303 × 216

IFC

R 16 460

R 13 991

R 13 168

265 × 180

297 × 210

303 × 216

IBC

R 16 028

R 13 624

R 12 822

265 × 180

297 × 210

303 × 216

Feature Cover Page

R 16 366

R 13 911

R 13 093

265 × 180

297 × 210

303 × 216

DPS

R 28 975

R 24 629

R 23 180

265 × 390

297 × 420

303 × 426

Full Page

R 15 676

R 14 486

R 13 939

265 × 180

297 × 210

303 × 216

Half Page – Vertical

R 10 412

8 850

8 330

265 × 90

297 × 105

303 × 111

Half Page – Horizontal

R 10 412

8 850

8 330

133 × 180

148 × 210

154 × 216

Quarter Page

5 878

5 532

133 × 90

148 × 105

154 × 111

6 915

Advertorial

Inserts

• Full page, full colour (500 words, 2 pics, logo, trade details): R 14 500 • Half page, full colour (250 words, 1 pic, logo, trade details): R 7 500

• Two pages: R 12 241 • One page: R 7 630

All prices exclude agency commission and VAT.

Park Lane WU

Regal BRS

Hand Mixer 2 speed settings Eject button for releasing beaters Fingertip speed control

Electric Carving Knife Universal blade for different food types Soft-grip handle Fingertip control buttons

Blender Set Balloon whisk 200 g chopper bowl 600 ml beaker

Can Opener Hands free operation Magnetic lid holder Built in knife & scissor sharpener

COL L E C T I ON

THB/28467/HGR

Styled For Life!

Easy meals are at your fingertips with these Salton Elite appliances in the stylish Food Collection. They’re all ergonomically designed for ultimate convenience and time-saving in the kitchen. Made from the finest materials, with fingertip control and built-in safety features – you’ll find them a pleasure to use. And your family and guests will appreciate the results. Enjoy!