In 1982 after extended areers in retailing nd manufacturing Stewart Cohen and Laurie Chiappini, our oint Chairmen, were etermined to start their wn business as partners. They established a etail consultancy called United Stores which M r Price is unique. was designed to combine Although the first store he buying power and opened in 1985 and we only ynergies of small began growing in the 1990s, etailers to improve their the success story is much older. ompetitive position. After building a client It is a story about a struggle ase of 50 retailers, against conventional thinking; he business struggled about a dream to make a uring the recession of difference and a strong will to he early 1980’s. In order win against huge odds. o create a badly needed ositive income stream he two partners created a anchisedJohnretail operation Orr or their clients called Mr Price’s Factory Shop nd the first store was pened in Klerksdorp in 985. base of 50 retailers, he business struggled uring the recession of Mr Pr ice’s Fa he early 1980’s. In order ctory Sh op in K lerksdorp o create a badly needed i Stewart Cohen and Laurie Chiappin ositive income stream he two partners created a anchised retail operation
The original John Orr store
Alastair McArthur
First group o
wned store in
Brickhill Ro
ad
Founders Stewart Cohen and Laurie Chiappini both started out on shop floors and when they met in autumn 1979 a relationship evolved based on mutual trust and a positive vision. Their earlier employment experiences had given them a negative view of typical businesses and they believed there was a better way of doing business – one where individuals exploited their full potential. In early 1985 the partners recognised factory shops as the future, but they did not have the money to establish one. They felt clothing prices were too high and dreamt of a new kind of factory shop selling quality merchandise at substantially lower prices. This would be a thirdgeneration factory shop boasting attractive interiors, wanted merchandise and incredible advertising, but a very low cost structure to allow for low margins off high volumes. The very first Mr Price Apparel stores were franchised because of their lack of funds. However when John Orrs Ltd, which also owned Miladys, was acquired in 1986 by Stewart and Laurie in partnership with a bank, the listed company began opening Mr Price stores and acquiring the franchised stores. Alastair McArthur joined the group as MD of Mr Price and the name of the company was changed over time to the Mr Price Group. Mr Price stores were opened rapidly throughout South Africa and by 1995 there were 237 stores. In 1996 Sheet Street was acquired and Mr Price Home stores and Mr Price Sport stores were established in 1998 and 2007 respectively. Today there are approximately 1000 corporate owned stores in Southern Africa and 24 franchised stores abroad.
Stewart had seen his father work 40 years for one company, but because he did not own shares, he had retired on an inadequate pension. In his heart Stewart knew there was another way whereby successful companies share their wealth creation with employees.
64
360 48
300 240
32 180 120
Share price - Rands
Their dream was that every associate hold their shares and use the long-term growth in the value of those shares to build financial security and a foundation for a happy home life.
25 YEAR COMPOUND ANNUAL GROWTH RATE
420
HEPS and DPS - Cents
Stewart and Laurie studied other companies where the associates had shares or share options – and were moved by stories of truck drivers and sales associates who became wealthy because of that initiative.
In 2011 the group celebrated the silver anniversary of the change in control of John Orrs. During that quarter century sales grew from R100 million to R10 billion, attributable profits rose from R2,6 million to over R1 billion and the share price increased from 30 cents to R75, in the process benefitting thousands of associates.
16
60
1986
1991
1996 Share Price
Headline earnings per share 23.5%
2001 DPS
Dividend per share 25.3%
2006
2011
HEPS Share price 26.2%
Their story is proof that dreams can become a reality if pursued with passion, value and partnership.
Stewart Cohen & Laurie Chiappini Honorary chairmen