Pepkor On Refurb Spree After South African Riots Shutter Stores
Pepkor On Refurb Spree After South African Riots Shutter Stores
Pepkor Holdings Ltd. is rapidly reopening stores after violent unrest in South Africa in July caused as much as 1.3 billion rand ($90 million) damage to about 550 shops, or 10% of its total.
The country’s biggest clothes retailer will have resumed trading in as many as 380 outlets by the end of September, Chief Executive Officer Leon Lourens said in an interview. By mid-November as many as 460 will have got back in business, he said.
Progress has been “remarkable” and hasn’t impacted the company’s typical annual store opening program, the CEO said. The company’s biggest chain is Pep, which specializes in lower-cost clothing and is a staple of town centers around the country.
Many South African companies were forced to halt operations in July as some of the worst riots since the end of white minority rule erupted across parts of the country, with trucks torched and stores looted. Pepkor, which also owns the Ackermans, HiFi Corp and Tekkie Town chains, has a presence in many malls that were badly affected.
The cost of refurbishing the outlets with new lights, tiles, shelving and apparel has been about 1.2 billion rand to 1.3 billion rand, Lourens said. Pepkor has sufficient insurance cover through Sasria Insurance Ltd., a state-owned firm that specializes in damage from protests, he said.
The almost 100 shops that won’t be open by November are those where “the property was burnt down or there’s structural damage,” Lourens said.
“Those ones are uncertain and will open as soon as landlords fix up the properties,” he said. The loss in revenue has been mitigated by customers switching to other Pep or Ackermans stores, he said.
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