South African online store cutting staff

Superbalist’s new owners plan to retrench at least 28% of the online clothing retailer’s workforce, with retrenchment notices set to go out by 2 December 2024, well-placed sources have told MyBroadband.

The company plans to send notices to 87 employees — nearly 62% of Superbalist’s current employees — with 75 occupied roles (53%) potentially affected.

The retrenchments come after Naspers-owned Takealot sold Superbalist to a South African consortium of retail and private equity investors led by Blank Canvas Capital.

One source told MyBroadband that the new owners decided to halt Superbalist’s private label for clothing.

Everyone working on Superbalist’s private label will be impacted, including designers, buyers, some engineers, and finance.

Staff were warned about the impending retrenchments on Tuesday, 1 October.

According to a document MyBroadband has seen, Superbalist plans to cut its entire Vertical Design Centre and Trend and Design department, which have 51 staff between them.

It will also serve 12 employees in engineering with retrenchment notices, with 10 occupied roles potentially affected.

Once the dust has settled, Superbalist anticipates that it will have 51 engineers remaining, and 23 people in its internal creative agency.

A person close to Superbalist also told MyBroadband that aggressive markdowns of certain items have begun.

These markdowns range from Mango to their private labels as Superbalist tries to clear terminal stock.

News that Takealot was looking to offload Superbalist first emerged in March, when well-placed industry sources told Daily Investor that Takealot was investigating the sale of the online clothing retailer.

Superbalist, initially known as Citymob, was founded in November 2010 by three local entrepreneurs – Luke Jedeikin, Claude Hanan, and Daniel Solomon.

Citymob quickly became a favourite among online shoppers thanks to its exclusive experiences, premium products, and hand-selected styles.

In 2013, Citymob pivoted the business to fashion e-commerce as Superbalist, which became South Africa’s largest online fashion retailer.

Naspers-owned Takealot acquired Superbalist in August 2014 after it received a US$100 million cash injection to expand its South African operations.

Superbalist continued to operate as an independent brand under its existing management team, led by Hanan and Jedeikin.

However, the founders left Superbalist in December 2019 and joined The Foschini Group (TFG) two years later to help the company realise its e-commerce ambitions.

Last year, Superbalist embarked on a Section 189 retrenchment process to restructure its business.

It explained that growth post-Covid has not reached the levels that had been forecast.

“As such, we need to reevaluate our structures to ensure that the business operates effectively in this current economic environment,” it said.

It is understood that Takealot is confident it can compete against Amazon, which launched its South African marketplace this year.

However, it was concerned that low-cost Chinese retailers like Shein, Temu, and Wish may negatively affect Superbalist’s operations.

When Takealot was investigating the sale, Shein and Wish already had an established presence, and Temu had made a strong entry into the South African e-commerce market.

Experts said it made sense for Takealot to offload Superbalist and focus on Takealot with Amazon entering the market.

MyBroadband contacted Black Canvas Capital for comment but received no response before publication.