OPINIONISTA: Business Highlights of the Week: For Clicks, it’s goodbye and thank you for the Musica, while hardware shares rise

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It’s a little ironic that Clicks announced plans to close all its Musica stores in the same week that shares in GameStop, a similar old-format chain of video game shops in the US, have literally taken off. However, that’s little to do with demand for its products and more about a bunch of retail investors cornering short sellers of the stock.

GameStop’s stratospheric ascent this month has been driven by WallStreetBets, a community of retail investors and traders with a chat room on social media platform Reddit.

The stocks started coming back down to Earth on Thursday, however, as market regulators including the Securities and Exchange Commission were called on to investigate potential market abuse due to the bubbles that had been created. So, it’s hardly surprising that Clicks is closing the music and entertainment retailer it acquired in 1992 when people still bought CDs and video games. It says it has been operating in a declining market for several years due to the global shift to the digital consumption of music, movies and games. It has already closed 19 stores since the start of its 2021 financial year, with the remaining 59 outlets set to close as their leases expire over the next four months.

Cashbuild isn’t alone. Last week, Massmart reported a stronger sales performance in its home improvement and DIY categories. Pepkor’s The Building Company, which it’s busy selling to Cashbuild, has also done well. And Italtile says its first-half profit will be at least 25% higher. It too says the work-from-home trend has boosted demand for home improvement products, with lower interest rates and payment holidays supporting spending.

Under the SLA, Ascendis needs the consent of more than two-thirds of its lenders for major corporate actions, including asset disposals. And London-based investment firm Blantyre Capital and investment fund L1 Health, which holds more than a third of its debt and can therefore veto any decisions, would prefer it to take a different approach to recapitalising itself and reducing debt to a sustainable level – perhaps including a sizable rights issue.

 

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