Moneyweb reports that Stuttafords has officially triggered the process to close its stores at the Canal Walk Shopping Centre in Cape Town, as well as Rosebank Mall and Clearwater Mall in Joburg.
It has also called time on two of its 14 stand-alone stores.
The closures come in the wake of an aggressive price slashing exercise launched over the past month to clear old stock and raise capital for the purchase of new stock for the winter season, after running out of money for new merchandise.
According to sources with intimate knowledge of the matter, Canal Walk Shopping Centre management have been pushing to kick the ailing retailer out to make room for tenants who are prepared to pay higher rental fees for the prime retail space.
There’s talk that Stuttafords’ space may be taken over by Swedish retailer H&M.
The retail chain – which owes creditors and suppliers in excess of R800 million – went under voluntary business rescue in October last year, as it faces liquidation as a result of unrelenting competition from a growing number of international retailers and reduced consumer spending.
“Over the past two years, Stuttafords has embarked on an aggressive repositioning, consolidating stores by eliminating loss-making locations and investing in a narrower, more efficient brand and category assortment that resonates more effectively with the younger black market,” Stuttafords CEO Robert Amoils said at the time.
Despite these measures and others that include consolidating head office into a centralised location, enhancing the visual appeal of its stores and investing in a comprehensive customer relationship management system, Stuttafords has struggled to remain competitive.
“We need to make sure that we are maximising trading in May. If the stock doesn’t clear, then we need to find other funding methods in order to purchase next-season stock,” Stuttafords business rescue practitioner John Evans was quoted saying earlier this month.
Shareholders and creditors are expected to meet at the end of the month to vote on a new business rescue plan, after four previous proposals were rejected or withdrawn.
Some suppliers have refused to release new stock to the department chain until its business rescue plan is finalised.
Additional reporting by Moneyweb