| Thu 20 Sep 2001, 0:00 | | Profurn And Courts Launch Mega Store Concept In Sa |
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PRESS RELEASE
SHARE CODE: PON
ISIN CODE: ZAE000016481
20 September 2001
Profurn, in a joint venture with UK-based Courts plc, will tomorrow (21
September 2001) open South Africa's first Megastore in Fourways,
Johannesburg.
The megastore is the first of its kind in the country - a 7000 square metre
furniture and electrical store, with a vast array of local and imported
goods. The concept represents a completely new shopping experience, with a
retail theatre, banks of TV screen promotions and an international layout
conceived by top retail designers.
"After an extensive two year research project into the South African
furniture retail market, we concluded that there was a need to diversify and
change the landscape of the furniture industry. Our response was the
concept of the megastore. A metropolitan based, one stop shop for
furniture, electronics and housewares, which would appeal to a broad
customer base."
"At this stage, we recognised the need for an international partner to
provide an international buying capability and jointly invest in the
project. After some investigating, Courts plc stood out as the most
appropriate partner." explained Gavin Walker, CEO of Profurn.
Profurn already has a relationship with Courts, with a 33% investment in
Courts Mauritius, which extended to a store in Madagascar. Michael Hacker,
the Finance Director of Courts Plc is also a director of Profurn.
Profurn's furniture operations have traditionally not been focused in the
metropolitan areas with majority of Protea, Barnetts and Morkels stores
located in rural towns and smaller urban areas, and Supreme located outside
of South Africa.
The location of the Mega stores in the metropolitan areas of South Africa
enables Profurn to enlarge its target market to the upper LSM, metropolitan
groups. In addition, the potential cannibalisation of the target market of
the existing furniture stores is minimal.
Although Profurn is undergoing a period of consolidation in its principal
business units, which will last until the end of next year, Walker believes
that the Mega store is a long-term strategy.
"We estimate that Courts Mega Stores will have in excess of 10% of the
furniture, appliance and electronics retail market in South Africa within a
5-year period. This project therefore has the potential to almost double
Profurn's current market share," said Walker.
"We see the Mega stores as our principal avenue for growth in South Africa
and will therefore be investing some of our additional cash into the Mega
stores."
The Mega stores will require a cash investment averaging R70 million per
annum over the next five years. Thereafter the business will reach a mature
state and will largely be self-funding.
"We believe that this concept will change the landscape of furniture
retailing in metropolitan South Africa," said Errol Le Blanc, managing
director of Courts Mega Stores. "We believe it is the right model and it is
being launched at the right time. The extensive management resources and
experience of Courts and Profurn will support and ensure the success of the
project."
Ends
Issued by:
Justine Hibbert Brunswick (011) 442 8803 / 083 443 4347
Nicola Atherstone Brunswick (011) 442 8803 / 083 326 7793
For further information:
Gavin Walker Profurn (011) 403 7124 / 082 900 8468
Errol Le Blanc Courts Mega store (011) 549 6600 / 083 675 8363
