The 2011 financial year has been the most gratifying year for JD Group since the strategy to refocus the Group into retail and financial services was set in motion. It has been another year of strategic delivery as Furniture Retail and Financial Services continued to benefit from recent investments and considerable efforts to cement their business models. Both divisions were rewarded with a marked improvement in their bottom line. It is equally pleasing that the Cash Retail division showed top-line growth through volume and market share gains despite the severe deflationary and competitive pressures affecting their businesses.
A milestone for the year was undoubtedly the transaction with Steinhoff. It has introduced two substantial businesses into the Group in line with the core strategy to establish and grow a world-class diversified retail and financial services group. The transaction has strengthened the ties between the two organisations. With the Steinhoff Group as a strategic shareholder, JD Group will gain access to its global reach and intellectual capital, with benefits relating to product sourcing and new store formats, among others. It has also renewed JD Group’s focus on southern Africa with the disposal of Abra as part of this transaction. Abra, the Group’s subsidiary operating in Poland, was faced with tough trading conditions. However this did not detract from the overall performance of the Group.
A particularly noteworthy aspect of the 2011 performance is that the total sales of Furniture Retail (on a 52-week basis) reached R5 billion for the first time since 2006. The implementation of the National Credit Act (NCA) in 2007, resulted in more stringent credit granting conditions and temporarily constrained retail sales. The division has since been faced with the impact of pedestrian domestic economic growth. The achievement of visible top-line growth can be attributed to the focus of Furniture Retail on its core retailing competencies as well as meeting and exceeding the expectations of its customers, giving rise to pleasing market share gains, which once again validates the decision to separate retail and financial services.