Abstract
The retail sector is vital to the South African economy in terms of GDP and employment. However, the sector has been in decline recently and has lost close to 20% of its market capitalisation in the past three years. This study attempts to explain what drives the perception of value in the sector, by investigating the factors that impact performance in the JSE listed retail companies. The findings suggest that retailers need to focus on both company-specific factors and changing macroeconomic factors to ensure good performance. Sales volume growth attracts investment. Smaller retailers perform better than large caps in the longer term but are more affected during economic downturns than large caps. The positive and significant relationship between debt to equity ratio and the share price suggests that retailers are not penalised when increasing their leveraged ratios. However, retailers should protect themselves from problems by putting a ceiling on debt they acquire...
M.Com. (Finance)