Jet Stores (Pty) Ltd, a subsidiary of the regional textile retailer, Edcon has reportedly started shutting down some of its stores in a bid to save sales in Botswana.
Information reaching this publication is that Jet Stores has begun the throbbing but sales saving move to shut some doors to ward off retail cannibalization.
Jet is a subsidiary of Edcon alongside Edgars Stores among others.
Edcon, whose strategy is underpinned by comparable store growth, new space growth, margin expansion and credit, has been in operation for more than 80 years and have expanded its footprint to include over 1 273 stores through nine different store formats.
Retail cannibalization occurs when a company’s new stores steal customers from existing stores in a development that has got the eventual reduction of overall sales even though sales in the new stores generally do well.
Although Jet Stores Regional Manager – North, Nelson Sankoloba could not be reached at the time of going to press, Voice Money is reliably informed that a number of stores are being shut down.
Some Jet Stores staff who talked to Voice Money on condition of anonymity explained that a number of shops in Gaborone and Francistown as well as a number of major villages have been closed.
“Mr. Sankoloba is actually attending meetings in South Africa over the closure of stores,” revealed one member of staff, adding that Barclays Plaza branch in Francistown has been closed already.
She added: “The employees are currently packing up the merchandise that is being taken to other branches in Francistown and Selibe-Phikwe. But the most worrying issue is that the future of employees remains unknown.”
In May this year, Edcon Chief Executive Officer, Bernie Brookes, told the South African media that retail cannibalization is becoming a significant feature in the markets in which the retail group do operate in and it is for this reason that Edcon is shutting down stores where it can.
Cannibalization can hurt sales volumes and market share, he was quoted as saying. “As the leases come up, we are reviewing the stores to see if we should keep them open or not. It’s the most sensible thing to do, especially if you consider the market as it is right now,” said Brookes.
“In some cases, we are looking at reducing store size by closing certain departments or floors,” said Brookes.
In the year ended March 25, Edcon closed eight Edgars stores, four Jet stores and five Jet Mart stores.