Clicks to close Musica

Clicks will close its remaining Musica stores by the end of May after Covid-19 accelerated a deterioration in the chain’s sales. It acquired the brand in 1992.

Clicks said Musica had been operating in a declining market for several years owing to the structural shift globally to the digital consumption of music, movies and games from the traditional physical format. The pandemic had resulted in a rapid decline in foot traffic in destination malls where most Musica stores are located.

The group said it had closed 19 stores since the start of its 2021 financial year and the remaining 59 outlets would be closed as their leases expired over the next four months. In the stores that had been closed since September, the Musica staff had been absorbed into its expanding health and beauty store network and it said it was committed to accommodating the remaining staff where possible.

In a trading update for the 21 weeks to 24 January, Clicks said the rest of its business remained resilient as the second wave of the Covid-19 pandemic gathered momentum across the country late last year and into the new calendar year. However, trading in the early stages of the 21-week period was adversely impacted by protest action at Clicks stores across the country in the second week of September over an advert for TRESemmé shampoo that was perceived as racist.

The group’s retail health and beauty division grew sales by 8% over the period, while turnover at wholesaler United Pharmaceutical Distributors (UPD) increased by 10.6%, leaving group turnover 7.8% higher.

UPD was supported by increased demand for medicines and healthcare products from private hospitals and independent pharmacies during the second wave of the pandemic. Total managed turnover, combining UPD’s wholesale turnover and turnover managed on behalf of bulk distribution clients, increased by 18.1% as the business traded well and benefitted from distribution contracts gained in the prior year.Clicks reported good growth in front shop health sales as customers focused on preventative healthcare to boost their resistance levels with immunity-building vitamins and supplements,” chief executive Vikesh Ramsunder said. “Trading patterns continued to shift, particularly in December and January, as the Covid-19 related restrictions imposed by government further impacted consumer shopping behaviour. This was evident in fewer South Africans taking summer holidays, particularly to coastal areas where beaches were closed, and the delay in the reopening of schools from January until February.”

Clicks’ interim results for the six months to end-February are scheduled for release on 22 April. Its shares fell 1.4% to R257.69 yesterday.

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