JOHANNESBURG, March 20 (Reuters) – South African retailer Steinhoff SNHJ.J mentioned on Friday turnover had fallen, significantly usually merchandise, because of the partial or full closure of shops in a lot of European markets as a result of restrictions on motion.
Numerous international locations have imposed journey bans and restrictions on motion and public gatherings with the intention to include the worldwide unfold of the coronavirus.
Steinhoff’s normal retail shops in France, Spain, Poland and the Czech Republic are affected, Steinhoff’s assertion mentioned, including that the decline will final so long as the restrictions.
The efficiency of its fast-moving client items enterprise has been extra resilient, it added.
Steinhoff’s European shops fall beneath the Pepco Group, which owns retail manufacturers PEPCO, Poundland and Dealz.
“The extent and period of the present restrictions on commerce stay unsure and it’s too early to find out the precise influence of the pandemic on the efficiency of the group for the 2020 monetary 12 months,” Steinhoff, which additionally operates in Australia, mentioned.
“It’s clear, nonetheless, that the virus outbreak and ensuing restrictions could have a detrimental influence on general turnover and the underlying enterprise efficiency throughout this era.”
Shares within the Johannesburg-listed retailer ended the day 5.7% weaker.
The fast actions that administration of Steinhoff’s corporations is taking to handle the impacts of the virus embrace lowering working expenditures, lowering inventory of products impacted by the buying and selling restrictions and stopping all however important capital expenditure, it mentioned.
Administration can be making use of tax funds and different authorities reduction measures the place out there and taking actions to optimise working capital, with the intention to “defend profitability and cashflow.”
Firstly of the outbreak in February, Steinhoff’s consideration was targeted on efforts to mitigate disruption within the provide chain, however because the outbreak has progressed, “probably the most important impacts on the group have switched from these with a provide chain focus to these with a demand-side influence.”
Lots of the companies in Steinhoff supply merchandise from Asia. The retailer has benefited from its “well-diversified and versatile” provide chain, which allowed it to handle and mitigate provide points, it mentioned.
(Reporting by Nqobile Dludla, enhancing by Louise Heavens)
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