September 9, 2004

By Dirk De Vynck

Cape Town - The relatively competition-free existence of Cape Union Mart, the outdoors retail group, could soon be over.

This follows the launch of the Foschini Group's outdoors goods shops, eight of which are expected to open this year.

Ronnie Stein, the group financial director of Foschini, said the new outlets, branded Duesouth, had the potential to grow to 40 stores in South Africa. Other than a few independents and the outdoors merchandise offered by large retail formats such as Game and Makro, Cape Union Mart has had relatively little competition.

Foschini's Duesouth shops will be located in major shopping centres. This means they will be in direct competition with Cape Union Mart, which is already in most prime shopping complexes.

Stein said products, which included sole distribution rights on the North Face and Columbia brands, would be competitively priced.

Phillip Kravitz, the chief executive of Cape Union Mart, said it would have about 40 stores by the end of this year.

Cape Union Mart opened its first store in Cape Town in 1933, doing business as an "army and navy store" and becoming famous for selling everything from anchors to toothpicks.

Kravitz, the grandson of the company's founder, said Cape Union Mart started accelerating its expansion only from the 1980s.

The company has three outlets in Botswana and two in Namibia.

Although Cape Union Mart stocks some exclusive brands from overseas, it is probably best known for its own K-Way brand.

Asked about the competition it would face from Duesouth, Kravitz said Cape Union Mart would continue focusing on its own business.

Rob Forsyth from Investec Asset Management said the product mix of an outdoors store was totally different from Foschini's traditional clothing business and hence more work had to be put in before entering the market.

Also, up to three to five years ago clothing retailers found themselves in a difficult spot with high interest rates and low clothing inflation. Work also had to be done on the merchandise offered and the store look, which in many cases had become outdated.

Foschini's successes outside the clothing arena include its homeware division, @home, its Sportscene and Totalsports sport shops and its financial services division.

Foschini's shares rose 15c to R2.69 on then JSE yesterday. The general retailers sector gained 0.97 percent