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Mr Price online sales grow 195.3% in SA

Johannesburg - Online sales for clothing retailer Mr Price Group have increased by 195.3% to R44.7m in South Africa for the half year period ending 27 September 2014.

This is according to the Johannesburg Stock Exchange (JSE) listed company’s half year results, which reported a net income of R921m in the six month period compared with R747m a year earlier.

Mr Price reported that its combined online sales growth in South Africa and its other international markets grew by 185.2% to top R53.2m for the period.

Meanwhile, the company also said that its international online sales - in markets such as Nigeria, Ghana and Zambia - grew by 142.3%, “albeit off a low base”.

Online sales growth for Mr Price is still a small part of its business, as the company on Monday reported that its overall sales increased 15% to R8.3bn for the period.

"Two years ago we launched our online offer under the branding MRP.com and in August this year Mr Price Apparel opened a new  generation MRP store at the V&A Waterfront in Cape Town," said Mr Price CEO Stuart Bird.

“This new format is a big step forward in our strategy of integrating our store and online channels to ensure that customers receive a seamless experience," said Bird.

"Importantly, this is not a 'one-up' concept – we're offering the same merchandise at the same prices as our other stores," he added.

The company said that in its Mr Price Apparel division, “a growing online presence also had a positive impact on store performance”.

In its financial results, Mr Price also made mention of MRP Mobile, a 55% held subsidiary, selling cellular products to customers.

In July, MRP Mobile became only the second mobile virtual network operator (MVNO) in South Africa after Virgin Mobile

“As a MVNO, no investment in network infrastructure is required,” the company said.

Cash is still king

Despite the rise in online sales, Mr Price’s cash sales dominate its business.

The company reported that its cash sales grew 17.5% compared to slower credit sales growth of just 4.2%. Cash sales also constitute 80.9% of total Mr Price’s total group sales.

“Although consumer confidence increased slightly in the third quarter of 2014, retail trading conditions are expected to remain challenging in the medium-term,” Mr Price said.

Bloomberg reports that Mr Price’s shares increased 0.6% to 245.88 rand as of 2.22 p.m. in Johannesburg. The stock price has also increased 50% this year.

The company has raised its half-year dividend 26% to 211.5 cents.

* Follow @GarethvanZyl on Twitter. For more tech news, follow Fin24tech @Fin24_Tech.

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