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After 159 years, Stuttafords shuts up shop

Hopes that two Johannesburg outlets may be salvaged.

JOHANNESBURG – Department store Stuttafords, the 159-year-old “Harrods of South Africa”, is closing down, victim of a global shift to online retail and a domestic economic slump that has put brands such as Ted Baker and Gap beyond its customers’ reach.

Mirroring the fortunes of once-mighty department stores in Europe and the United States, the doyenne of the South African high street during apartheid and the two decades since applied for protection from creditors in October.

However, attempts to revive its fortunes proved futile and creditors voted in June to wind up the unlisted firm by August 1, with closing-down sales at its nine stores in South Africa, two in Botswana and one in Namibia.

In its flagship store in Johannesburg’s Sandton financial district, piles of naked mannequins lay in heaps next to bare shelves as the last few bargain hunters picked through trays of heavily discounted perfumes, make-up and clothes.

“We don’t know what’s going to happen – if we will still have jobs,” said one employee, who did not want to be named for fear of hurting her chances of staying on. “We only heard that maybe this shop will be one that will not close.”

For South Africa, it is the end of a piece of retail history.

The first shop was opened in Cape Town in 1858 by Samson Rickard Stuttaford with the vision of creating a Harrods-like department store in what was then Britain’s Cape Colony.

Its main Cape Town store, opened in 1938, was designed by in-house Harrods architect Louis David Blanc and echoed the British store’s famous frontage in London’s exclusive Knightsbridge district.

Through various changes of ownership, it never lost its focus on the middle and upper-class South African market, despite the economy’s failure to recover fully from a deep recession in 2009 sparked by the global financial crisis.

Chief executive Robert Amoils could not be reached for comment but has defended his approach to the tough conditions.

“I believe the path we set was correct,” he told business website Fin24. “We ran out of time. The market downturn was so swift, so severe.”

John Evans, a lawyer overseeing its closure, said he had received a last-minute approach that could salvage two Johannesburg outlets, in Sandton and Eastgate, which would save the jobs of 300 of the group’s 950 staff.

“There’s a chance we’ll save Sandton and Eastgate. If we do, we should be able to save 300 jobs,” he said.

‘Fall from grace’

Nearly all retailers in Africa’s most sophisticated economy have struggled as consumer sentiment has hit multi-year lows, a result of high unemployment and inflation gnawing at disposable income. The economy is now back in recession.

The slump is piling pressure on President Jacob Zuma, who faces increasing calls to resign due to a slew of corruption scandals and accusations of mishandling the economy.

Macy’s and Nordstrom in the United States have also hit tough times, suggesting Stuttafords’ woes are not unique to South Africa, Sasha Naryshkine of local asset manager Vestact said.

The main squeeze has come from cheaper retailers such as South Africa’s Woolworths, Sweden’s H&M and Spain’s Zara.

“The fall from grace in all these department stores is that people can get the same stuff online and there is a rise of other quality brands at a cheaper price,” Naryshkine said. “In an economic downturn, people are going to shop down.”

Nor is Stuttafords alone.

Footwear and accessories chain Nine West, owned by US buyout firm Sycamore Partners, and Spanish fashion chain Mango, whose local licences are held by House of Busby, have closed stand-alone outlets due to poor sales.

“The brands did not meet the required return on invested capital hurdles,” House of Busby chief executive Mark Sardi said.

Edcon’s Edgars, another clothing retailer ubiquitous in South African shopping malls, was taken over by creditors last year and had to restructure debt.

In May, no-frills retailer Mr Price posted its first annual drop in profits in 16 years, while rivals Woolworths and Truworths flagged lower or stalling earnings last week. 


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Hope that happens. My favourite SA clothes retailer………

” victim of a global shift to online retail ” <– pure BS

I really liked some of the clothing that Stuttafords had, but the problem that they had (and perhaps the mistake that they made) was that all of their clothing was expensive.

So the first thing that came to mind when people thought of Stuttafords was "expensive"

For a niche boutique that is fine. For a large clothing retail store (chain in this case) it is disasterous.

You have huge floor space and staffing requirements which result in high costs, and your sales volumes are very low in a country where absolute maximum 5% of the population can afford your products.

This in an environment where there is competition from other retailers that offer better value for money.

What Stuttfords should have done is had scaled departments. Lower end clothing which was affordable would get customers into the store and spending and later on due to brand loyalty (towards Stuttafords), that would spill over into the occasional purchases in the higher end products.

Their clothing was good. Their prices weren't.

Unlike Edgars where most of their clothing isn't good and their prices are still not good.

Too late. So sad.

I think the Stuttaford story is a classic example of a lack of forward thinking by management.

Any business constantly has to think how they will stay on top of their game and that can only be done through innovation,especially in today’s era where the internet poses a major threat and has made some businesses even extinct,just think of DVD rental businesses in the US which does not even exist anymore (brick and mortar format).US retailers JC Penny and Sears also succumed to this phenomenon recently and had to close a lot of stores.Probably the greatest example in business history of a lack of forward thinking could be found in mobile manufacturer BlackBerry who once owned a large market share which was diminished because of smartphones invented by the likes of Apple and Samsung.

One also ought to compliment all the wonderful company’s out there who remained forward thinking and in the process generated wealth for their shareholder

Dolan Rensburg

I recall engaging the CEO and the one Business Rescue Practitioner on a business model that I believed would bring some sustainability for Stuttafords. It involved offering some equity to customers in exchange for loyalty and sales. Its inspired by something I believe in; that companies that are owned or can be owned by their customers for their potential wealth benefit are more sustainable, in this age of easily saturating markets, than those that merely exchange goods for money. The model was rejected.

I engaged them at a time before things got this bad. I wasnt bothered by the rejection, as there are those who love and those who hate the model, but it was the feeling I got from them in the short interaction I had with them. I felt that these guys didnt have a burning desire to save this thing. I may be wrong, but transpiring events are speaking for themselves. I do hope they find committed buyers for Sandton and Eastgate.

Just to add, the model isnt a silver bullet, it still needs the company to price right, differentiate right and offer quality that makes the customer feel right.

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