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Deacons FY16 disaster
Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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 Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Quote:Results for the Financial Year ended 31 December, 2016
The business recorded positive results in H1 of 2016. However, in H2 of 2016, several factors negatively impacted the peak trading season that resulted in suppressed sales and margins. Existing malls registered lower footfall and new retail property registered lower purchase conversion rates that led to cannibalization. Interest rate capping on bank lending led to a further reduction in liquidity in the market, thereby decreasing customer spend and store productivity.
Revenues declined by 3.1% over Y2015 across key brands, as a result of product supply challenges from South Africa during the second half of the year. The delay in the launch of all green field malls led to a slow start for the new stores. While not fully let, these malls have shown progressive growth and are expected to mature in the medium term.
The Total Income decreased by 12.4% compared to the prior year due to a foreign exchange loss in 2016 and the sale of Woolworths in 2015, which was an exceptional item. The Expenses grew by 24.6% driven by the addition of new stores and a change in accounting policy to conform to International Accounting Standards 2 and 17. The delay in mall openings for 8 stores contributed to the increase in the operating costs due to an earlier deployment of shop fittings, staff and stock.
The Total Comprehensive Income for the Year was a loss of Kshs. 276.9 Million.
malls, malls, malls Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Quote:Future Outlook
Whilst the business continues to focus on rationalisation of the existing operations and reduction of operational costs, major initiatives took place in Q4 2016 that the Directors believe will enhance sales in 2017.
The F& F brand by Tesco was opened in The Hub in December 2016 and a further branch was opened in The Sarit Center in February 2017. The sales to date have been encouraging and the Directors are confident of the success of this new brand due to its value proposition. The Two Rivers Mall which was opened in February 2017 has four Deacons brands namely: Mr Price Apparel, Mr Price Home, Adidas and Bossini.
In addition to this, the Company launched two brands (Bossini and Mr Price Apparel) at the Kigali Heights Mall in Rwanda and initial results have been encouraging.
The sales from these new outlets and the full year impact of the stores opened in 2016 are expected to contribute to overall sales growth in 2017.
Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Quote:Dividend
The Directors do not recommend the payment of a dividend in respect of the Financial Year ended 31 December, 2016.
Annual General Meeting
The Annual General Meeting of the Company will be held at the Southern Sun Mayfair Hotel, Parklands Road, Nairobi on Thursday, 15 June, 2017 at 11.00 a.m.
Pesa Nane plans to be shilingi when he grows up.
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Rank: Elder Joined: 2/26/2012 Posts: 15,979
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Pesa Nane wrote:Quote:Results for the Financial Year ended 31 December, 2016
The business recorded positive results in H1 of 2016. However, in H2 of 2016, several factors negatively impacted the peak trading season that resulted in suppressed sales and margins. Existing malls registered lower footfall and new retail property registered lower purchase conversion rates that led to cannibalization. Interest rate capping on bank lending led to a further reduction in liquidity in the market, thereby decreasing customer spend and store productivity.
Revenues declined by 3.1% over Y2015 across key brands, as a result of product supply challenges from South Africa during the second half of the year. The delay in the launch of all green field malls led to a slow start for the new stores. While not fully let, these malls have shown progressive growth and are expected to mature in the medium term.
The Total Income decreased by 12.4% compared to the prior year due to a foreign exchange loss in 2016 and the sale of Woolworths in 2015, which was an exceptional item. The Expenses grew by 24.6% driven by the addition of new stores and a change in accounting policy to conform to International Accounting Standards 2 and 17. The delay in mall openings for 8 stores contributed to the increase in the operating costs due to an earlier deployment of shop fittings, staff and stock.
The Total Comprehensive Income for the Year was a loss of Kshs. 276.9 Million.
malls, malls, malls Mmh...so if the malls close down they will not sell? "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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murchr wrote:Pesa Nane wrote:Quote:Results for the Financial Year ended 31 December, 2016
The business recorded positive results in H1 of 2016. However, in H2 of 2016, several factors negatively impacted the peak trading season that resulted in suppressed sales and margins. Existing malls registered lower footfall and new retail property registered lower purchase conversion rates that led to cannibalization. Interest rate capping on bank lending led to a further reduction in liquidity in the market, thereby decreasing customer spend and store productivity.
Revenues declined by 3.1% over Y2015 across key brands, as a result of product supply challenges from South Africa during the second half of the year. The delay in the launch of all green field malls led to a slow start for the new stores. While not fully let, these malls have shown progressive growth and are expected to mature in the medium term.
The Total Income decreased by 12.4% compared to the prior year due to a foreign exchange loss in 2016 and the sale of Woolworths in 2015, which was an exceptional item. The Expenses grew by 24.6% driven by the addition of new stores and a change in accounting policy to conform to International Accounting Standards 2 and 17. The delay in mall openings for 8 stores contributed to the increase in the operating costs due to an earlier deployment of shop fittings, staff and stock.
The Total Comprehensive Income for the Year was a loss of Kshs. 276.9 Million.
malls, malls, malls Mmh...so if the malls close down they will not sell? Waste of ink explaining why they reported loss. I know why they made a loss and it's very simple. They didn't sell enough to cover their costs. Life is short. Live passionately.
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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Their profit last year is entirely apportioned to Woolworths really. They need to reduce their prices if they intend to remain relevant/make a profit. Went to buy a laundry basket and they were selling a plastic one for 3800/- got it at nakumatt (a similar one) for 339/-
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Rank: Member Joined: 10/26/2015 Posts: 151
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Horton wrote:Their profit last year is entirely apportioned to Woolworths really. They need to reduce their prices if they intend to remain relevant/make a profit. Went to buy a laundry basket and they were selling a plastic one for 3800/- got it at nakumatt (a similar one) for 339/- Spent 6000 on a bag whose strap broke the same week. Never went back.
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Rank: Chief Joined: 1/3/2007 Posts: 18,050 Location: Nairobi
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Who here shops at any Deacons store? Even the prices at Mr. Price are not budget friendly. There may be a niche but... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 5/21/2014 Posts: 184
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VituVingiSana wrote:Who here shops at any Deacons store? Even the prices at Mr. Price are not budget friendly. There may be a niche but... You mean Mr. 'Pricey'?  For the quality of the stuff, the supposedly cheap price is very expensive. I bought shoes there 2 years ago and they were absolutely bogus quality. Never gone back! They either change or perish. Stalls and online sellers are going to bash them. There are too many opportunities all around. Open your eyes and maybe you'll spot one
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Rank: Member Joined: 5/21/2014 Posts: 184
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Even for those who can afford, there exists many alternatives in terms of value for money... A couple of their stores are really the embodiment of 'cheap is expensive'. There are too many opportunities all around. Open your eyes and maybe you'll spot one
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Rank: Elder Joined: 9/15/2006 Posts: 3,901
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Surely, after stepping back 15yrs into the past, to the crisis that was there before Kibaki came into power, something needs to change:
1. Board?
2. CEO?
3. What else?
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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actuarywahisa wrote:Even for those who can afford, there exists many alternatives in terms of value for money... A couple of their stores are really the embodiment of 'cheap is expensive'. It was a noble effort to bring brands to Kenya. However the pricing is totally out of favor here. Mr. Price in Jozi is so affordable. Why would the same thing in NBO cost 3 or 4 times more?
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Horton wrote:actuarywahisa wrote:Even for those who can afford, there exists many alternatives in terms of value for money... A couple of their stores are really the embodiment of 'cheap is expensive'. It was a noble effort to bring brands to Kenya. However the pricing is totally out of favor here. Mr. Price in Jozi is so affordable. Why would the same thing in NBO cost 3 or 4 times more? That's the big question... possunt quia posse videntur
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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maka wrote:Horton wrote:actuarywahisa wrote:Even for those who can afford, there exists many alternatives in terms of value for money... A couple of their stores are really the embodiment of 'cheap is expensive'. It was a noble effort to bring brands to Kenya. However the pricing is totally out of favor here. Mr. Price in Jozi is so affordable. Why would the same thing in NBO cost 3 or 4 times more? That's the big question... And still make losses 🙃
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Rank: Member Joined: 3/9/2010 Posts: 320 Location: kenya
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Horton wrote:maka wrote:Horton wrote:actuarywahisa wrote:Even for those who can afford, there exists many alternatives in terms of value for money... A couple of their stores are really the embodiment of 'cheap is expensive'. It was a noble effort to bring brands to Kenya. However the pricing is totally out of favor here. Mr. Price in Jozi is so affordable. Why would the same thing in NBO cost 3 or 4 times more? That's the big question... And still make losses 🙃 I have noted that most of the firms listed recently under SME are in the red zones. Work hard at your job and you can make a living. Work hard on yourself and you can make a fortune.
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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http://www.businessdaily...14830-6rpl3n/index.html
quote When announcing its full-year results two weeks ago, the retailer said interest rate capping on lending effective last September led to a reduction in liquidity in the market, decreasing customer spend and store productivity. unquote So people take loans to buy clothes?
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Rank: Elder Joined: 2/22/2009 Posts: 2,449 Location: Africa
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Chaka wrote:http://www.businessdailyafrica.com/corporate/Deacons-branch-closures-signal-looming-job-losses/539550-3914830-6rpl3n/index.html
quote
When announcing its full-year results two weeks ago, the retailer said interest rate capping on lending effective last September led to a reduction in liquidity in the market, decreasing customer spend and store productivity.
unquote
So people take loans to buy clothes?
I'm surprised they did not mention the drought. People need to eat first before they buy clothes
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Rank: Elder Joined: 6/23/2009 Posts: 13,472 Location: nairobi
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Shak wrote:Chaka wrote:http://www.businessdailyafrica.com/corporate/Deacons-branch-closures-signal-looming-job-losses/539550-3914830-6rpl3n/index.html
quote
When announcing its full-year results two weeks ago, the retailer said interest rate capping on lending effective last September led to a reduction in liquidity in the market, decreasing customer spend and store productivity.
unquote
So people take loans to buy clothes?
I'm surprised they did not mention the drought. People need to eat first before they buy clothes The rate cap is real. Even Safaricom is feeling it
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Elder Joined: 12/4/2009 Posts: 10,639 Location: NAIROBI
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http://kenyanwallstreet....-senior-management-team
Nairobi Securities Exchange listed fashion retailer, Deacons (NSE; DCON) has sacked five of its twelve most senior management team a week after announcing plans to shut down undisclosed number of “unprofitable stores” by the end of next month. Those leaving the embattled fashion retailer are; The Chief Finance Officer (CFO) Joseph Sitati; Retail Director Jedidah Thoto; Head of ICT Olive Waithaka; Head of 4U2 & Angelo Brands Martha Wareithi and the Head of Sports Division Robert Nderitu. In an Interview with The Business Daily, Deacons Chief Executive said, “We have to let go some senior managers as part of the austerity measures that are in response to the tough trading conditions we find ourselves in. The affected staff, who have served us well over the years will depart the company on Friday (May, 12 ,2017) with a negotiated send-off package which I believe is competitive.” Deacons is engaged in the retailing of franchise fashion products and currently runs about 46 stores across Kenya, Uganda, Rwanda, and Mauritius employing approximately 350 people. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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