First the JSE, then HomeChoice to head into Africa

It might not seem to be the ideal time for a largely credit-based retailer to list on the JSE, but catalogue retailer HomeChoice is heading to the bourse next month after a two-year hiatus on its listing plans.

Shirley Maltz, CEO of HomeChoice Holdings, said a listing was part of the long-term plan, but the company had stepped back because of the credit market.

HomeChoice delisted from the JSE in 2003 and had planned to relist at the end of 2012. But the plan was put on hold when the credit environment deteriorated.

"The market is more stable and we're comfortable with our credit. I think we're nearing the end of the downturn. There's another year or so that will be tough on the consumer, but for our business it's the right time. We're also seeing exciting demand from non-South African customers."

Maltz said the group did not plan to raise capital through the listing, although access to the public markets provided an additional source of funding to the internal and external sources now being used.

"Though we're not raising capital now, we will need capital over the next few years. We want to make sure the business is well positioned. We raised R100-million in bonds last year under a R500-million programme and wanted to be in the listed environment for potential capital flows."

Malta had been selected as the base for its new holding company, HomeChoice International, because it is home to the group's largest shareholder. It is a European Union member country, with no restriction on capital flows. The company's largest shareholder is GFM Limited, which holds 83% of the shares and is based in Malta.

"Expansion into the rest of Africa presents a major growth opportunity for our business in the medium to long term. Creating an international holding company will enable faster and more efficient allocation of capital to accelerate our growth in Africa," said Maltz.

HomeChoice trades in Botswana, Lesotho, Namibia and Swaziland. It recently expanded into Zambia. At June 2014, customers in these African countries accounted for 11.8% of retail sales.

Maltz has been group CEO for the past year. Before that she was retail CEO for about eight years. She has been in operations, credit and marketing, and comes from a background in asset management and law.

She enjoys soaking up global trends in the retail environment and how these are interpreted in the South African market. About 85% of the company's customers are women.

Maltz joins a handful of women who are leaders of JSE-listed entities .The company has more women on the board than men.

Textiles make up about 70% of group sales, but the group has expanded into furniture, electronic goods and this year introduced a baby category.

Furniture makes up about 5% of group sales, but a dedicated showroom with mainly furniture will open in Wynberg in the Cape next year.

It will be the company's first foray into brick-and-mortar, but over the past 18 months, it has had a small retail footprint with pop-up stores.

HomeChoice was set up in 1985. It offers products through mail order, electronic channels (internet and cellphone) and telemarketing. It targets customers in the urban mass market, whose average salary is R7500 a month. In the past year, more than 90% of retail sales were on credit.

The listing is subject to regulatory approvals and consent from existing shareholders.