CNA’s digital sales have helped boost the retailer’s interim revenue by 4%, but profits at the franchise slipped by more than 45%.
In posting its results for the six months ended September 2013, Edcon’s CNA brand stores – which sell electronics, mobile phones and digital media – reported an increase in sales of 3.6% from the same period last year, boosted in sales was primarily due to continued growth of digital merchandise.
Revenue from the brand totaled R904 million – up from R869 million the from the same period last year – however, operating profit slipped to R6 million, from R11 million in 2012.
“In line with the strategy of right-sizing and converting existing stores to the right-purpose, the total number of CNA stores reduced by one store to end the period at 194 with the average space decreasing by 0.4%,” Edcon said.
Looking at group results, Edcon reported a 7.3% increase in revenue for the six month period, to R6.476 billion, from R6.038 billion recorded in the same period last year.
The group’s gross profits grew 6.2% to R2.15 billion (2012: R2.03 billion) – however, the company posted a net loss of R718 million, narrowed down significantly from a prior loss of R2.65 billion in 2012.
In June 2012, Edcon made a stronger play towards e-commerce in South Africa, starting with its CNA brand.
The group launched a revamped online store for the brand, offering customers a new channel through which to buy goods, using store credit.
The move was followed by the launch of an online store for the group’s Red Square perfume and cosmetics retail brand, with the group actively looking at which brands to launch next.
However, despite the move online, Edcon head of e-commerce, David Gibbons previously noted that the group’s main focus is primarily on its brick-and-mortar operations.
“It’s still day one in terms of our e-commerce stores,” Gibbons said. “At this stage online is strategically and not financially important to the Group.”
“Our online sites therefore act as a virtual window to our stores, so we expect the biggest gain to still be in the physical stores,” he said.