SCM’s furniture and appliance sales recovering

Press, 13 September 1983, Page 20

SCM’s furniture and appliance sales recovering

Furniture sales have been a growth area for Smiths City Market, Ltd, the Christ-church-based retailing group, in contrast to a national downward trend. The company had responded effectively to competition through its shops in Christchurch, Dunedin and Mosgiel and future results should be “most satisfactory,” said the chairman, Mr D. S. Smith, in the report of Smiths City Market for the year to April 30.

As reported previously, audited group profit for the year jumped 74.9 per cent to $2,644,647. Sales were up 21.5 per cent, to $47,773,610. These results were despite a three-month decline in furniture and appliance sales after the 1983 Budget and increased competition in most areas of the group’s operation. Widespread discounting to clear excess stocks led to a period of relative unprofitability, Mr Smith said. “We have reacted by strengthening our promotional efforts within predetermined limits and the results have been pleasing.” Sales and profit margins on appliances returned to normal only recently, although significant discount-

ing continued on videos and microwave ovens. The company had taken appropriate action aimed at boosting the contribution to group profits in the present year from appliance retailing, he said. Its market share of hardware and building supplies increased, Mr Smith said. Sales by the Ashburton company, Tuckers, Ltd, had not grown as much as those elsewhere in the group partly because of the effects of a drought on that community. The commercial sales division in Christchurch had raised its market share and home renovation was expanded. “Strong competition and tighter margins continue to be a feature of the building supplies market in Christchurch,” Mr Smith said.

Auction and trade-in activities had continued to be a big support for the group’s retailing operations. Growth in sales and profit from auctioneering and trade-ins had been excellent.

However, the downturn in commercial and residential property sales led to reduced profit contribution by the real estate associate company, George Anderson, Smiths City Market, Ltd.

The price freeze had af- , fected the manufacturing activities of Dundas Trading, Ltd, and Frame Services, Ltd, which both had profit declines for the year. I The manufacturing division of Tuckers, Ltd, had a successful year, increasing turnover and profit. The finance subsidiaries, Smiths City Market Finance, Ltd, and Paterson and Barr Finance, Ltd, both raised their profit contributions to the grow). Mr Smith saia the company had since April Drought an 80 per cent shareholding in Noel Leeming Television, Ltd, which has 12 shops in Blenheim, Rangiora, Christchurch, and Ashburton. That company would be expanded where ' opportunities arose and he predicted it would make a strong profit contribution in future.

The directors have re- ' commended an 8.5 per cent final dividend, making a ’ total for the year of 15 per cent, the same as last year and the maximum payable under the Limitation of Dividends Regulations. Smiths City Market will hold its annual meeting at the Autolodge Motor Inn, Papanui Road, at 7.30 p.m. on September 29.