Off-price bargains see DMF take off
Off-price retailer DMF has experienced a sales spurt over the past six months, which is noteworthy given the lacklustre performance of listed apparel retailers and the tough retail environment.
Modelled on iconic off-price retailers overseas, such as TJMaxx in the US, it suggests this model of retail is starting to gain traction in the South African market.
New stock is brought in weekly at DMF, all of it bought directly from overseas retailers. Off-price retail takes advantage of excess inventory from mainstream retailers that is available due to overproduction, the end of a range, cancelled orders or forecasting errors. The stock is sold at a significant discount, which is how off-price retail stores have found their niche.
Formerly called 32 Clothing, DMF was the first off-price retailer in SA selling goods at a real discount, with all stock bought overseas. It differs from other local discount competitors, which may offer a smattering of international brands but comprise mostly local brands.
About 500 brands on the floor
Same-store sales at DMF were up 36% in December last year from the same month the previous year, up 35% in January and up 68% in February. "Our system of retail is a treasure hunt. It's new to SA but some customers have embraced it immediately," said DMF founder David Fine.
In the US, people are used to shopping in this way, but it's not the norm for local consumers. "Americans have been shopping off-price for years - our challenge is to get consumers to completely embrace it."
DMF in Woodmead, Sandton, is one of the company's seven stores. This week, there were items from Michael Kors, Perry Ellis and Calvin Klein, among others. Overseas department store brands included Bloomingdales and Marks & Spencer.
"We thought in SA, with such a brand-focused consumer with limited income, it's the perfect way to give the consumer what they want," said Fine.
"We have inconsistent supply in each of those brands in each category. It's unlikely to find two of the same product with about 500 brands on the floor."
Fine said DMF was talking to franchise partners to franchise the model in emerging markets. "We think there's a market for 30 to 50 stores in SA."
DMF is currently only in Gauteng, but the company is looking to expand to Durban and Cape Town...