Publications
Partners
JD Group [JSE:JDG] – the parent company of furniture and appliances retail chains such as Morkels and Joshua Doore – is “aggressively” pursuing small towns in rural areas. It’s part of the group’s growth trajectory plan after it separated retail from financial services in a lengthy restructuring process. The move will surely up the stakes for competitors such as Lewis and Ellerine, as well as independents, which largely dominate such markets.
Already JD – which mainly trades in the upper LSM market – has significant penetration in small towns with brands such as Barnetts and Price ’n Pride. It’s now discovered Russells also has scope to grow in such markets. In its 2010 annual report, JD says it wants to grow its current network of 207 Russells stores to 225 by the end of its 2011 financial year through its foray into small towns. That’s a sizeable chunk for Russells, considering the group as a whole intends opening around 22 outlets during its current financial year – the same number it opened in its past financial year.
Russells was established in 1943 and acquired by JD in 1993. It trades in the mass middle market, offering furniture, appliances and electronic goods on cash or credit. Arie Neven, CE at JD’s traditional retail division, says in the annual report the division embarked on a pilot project to fine-tune its model to penetrate smaller regional towns where it’s had limited exposure to date. Accordingly, market studies were conducted to evaluate the retail potential of outlying regions while its property team was deployed to identify suitable locations within viable towns. “A number of locations have now been targeted and the Traditional Retail division opened new Russells stores in Frankfort and Heilbron,” says Neven. “As the regional model matures, the division will deploy its small town expansion programme in brand clusters to suit the demographics of the particular area.”
JD’s segregation of its retail business from financial services has refocused it as a furniture retailer while improving its debtors book through centralised collections.
Already JD – which mainly trades in the upper LSM market – has significant penetration in small towns with brands such as Barnetts and Price ’n Pride. It’s now discovered Russells also has scope to grow in such markets. In its 2010 annual report, JD says it wants to grow its current network of 207 Russells stores to 225 by the end of its 2011 financial year through its foray into small towns. That’s a sizeable chunk for Russells, considering the group as a whole intends opening around 22 outlets during its current financial year – the same number it opened in its past financial year.
Russells was established in 1943 and acquired by JD in 1993. It trades in the mass middle market, offering furniture, appliances and electronic goods on cash or credit. Arie Neven, CE at JD’s traditional retail division, says in the annual report the division embarked on a pilot project to fine-tune its model to penetrate smaller regional towns where it’s had limited exposure to date. Accordingly, market studies were conducted to evaluate the retail potential of outlying regions while its property team was deployed to identify suitable locations within viable towns. “A number of locations have now been targeted and the Traditional Retail division opened new Russells stores in Frankfort and Heilbron,” says Neven. “As the regional model matures, the division will deploy its small town expansion programme in brand clusters to suit the demographics of the particular area.”
JD’s segregation of its retail business from financial services has refocused it as a furniture retailer while improving its debtors book through centralised collections.
