Musica hit by store closures

FMCG SUPPLIER NEWS

BusinessTech.co.za - Jan 24th, 09:47

Clicks Group says that its music and entertainment retailer, Musica, has been impacted by the closure of several stores. 

In a trading statement for the 18 weeks to 30 December 2012, Clicks said that it increased sales by 11.7% to R5.97 billion, noting that consumer spending remains muted.

And, while Musica increased same stores sales by 8.2%, “turnover was impacted by the closure of a further seven stores during the period and total sales increased by 1.0%,” it said.

Clicks chief executive David Kneale said: “The trend of consumers delaying their purchases until closer to Christmas continued while consumers were increasingly value conscious this festive season.”

The arrival of several music download services in South Africa in recent months, led by Apple’s iTunes Store has thrown into question the longevity of music retailers.

In the UK, high street music and entertainment group HMV, recently went into administration citing a consumer shift toward online shopping and digital downloads.

In a recent interview with BusinessTech, the group said that it is optimistic that the arrival of iTunes in South Africa will complement its offering and stimulate the local music industry.

Moenieba Abrahams, Musica’s marketing & HR manage said that the official launch of iTunes in the country fitted in with the group’s expansion into entertainment-related products such as headphones, portable speakers, docking stations, etc.

“In fact, since we’re the largest stockist of headphones in this country, our brand will complement iTunes as more customers will be inspired to accessorise their music systems,” the marketing lead said.

Abrahams stated that CD sales were likely to increase “as they will benefit from additional exposure through iTunes, combined with the continuing demand for the physical format that still exists in this country”.