JOHANNESBURG (Reuters) - Steinhoff Africa Retail (STAR) reported a 15.5 percent increase in revenue for the quarter ended December on Friday, thanks mainly to a strong showing at discount clothing chains.
Steinhoff Africa Retail, spun off from Steinhoff International Holdings last year, said revenue grew to 18.4 billion rand ($1.52 billion) in the three-months ended Dec.31. On a comparable basis, revenue grew 8.5 percent for the quarter.
“While the challenges of deflation on the performance of Pep and Ackermans is expected to continue, management remains confident that the more affordable offer and lower prices within these brands will continue to resonate with a financially constrained consumer,” the company said in a statement.
Pep and Ackermans are clothing retailers. STAR also has stores selling building materials, furniture, consumer electronics and appliances.
STAR said in its trading update that while the building materials market was expected to remain subdued, the positive momentum in the remainder of the STAR group was expected to further drive performance in the 2018 financial year.
Steinhoff, which owns Poundland in Britain, Mattress Firm in the United States and Conforama in France, spun off its African chains to get a higher rating for its developed market businesses and to give investors keen on exposure to Africa a chance to invest in STAR directly.
($1 = 12.1069 rand)
Reporting by Nqobile Dludla. Editing by Jane Merriman