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Takealot-subsidiary Superbalist, one of the biggest South African online clothing stores, says it's looking to cut staff, after having recently reported increased pressure from offline retailers.
The company confirmed in a statement on Friday it had embarked on a Section 189 process that will restructure the business, saying this was unrelated to the rest of the Takealot group.
"Like many other businesses we are faced with the reality that growth post Covid has not reached the levels that had been forecast," it said.
"As such we need to reevaluate our structures to ensure that the business operates effectively in this current economic environment."
Superbalist is part of the Naspers group, which is on a drive for profitability in its e-commerce businesses by 2025.
In the year to end-June the Takealot group, which also includes SA's biggest online store as well as delivery service Mr D, reported its trading loss widened to $22 million (about R432 million at period end) from $7 million. The group reported pressure as Covid-19 restrictions eased. The Takealot group employed 2 668 in its 2023 year.
The company said at the time that despite increased competitive pressure from offline retailers, Superbalist delivered strong revenue growth of 11% in rand terms, but "aggressive pricing from brick-and-mortar retailers and discounts to clear ageing stock squeezed margins and resulted in higher trading losses."
Naspers said in late June that its e-tail businesses came under pressure in 2023 as offline stores that reopened "had a lot of inventory to offload, which was sitting in their warehouses while everything was closed." It also indicated that pressure had abated somewhat and it was expecting more stable conditions in its 2024 year.
"We are deeply conscious of the impact a change in business operations may have on our people," Superbalist said on Friday.
"Our first and most important focus is on doing what is right for them, while still being conscious of the decisions we must make to deliver a business geared for a long-term future.
"We will work hard to balance these two realities at all times."
News24 is part of the Media24 stable, which is owned by Naspers.
