Mediating factors for profitability in textile and footwear retail businesses

Abstract

Braamfontein is one of the suburbs of Johannesburg which is known for a wide variety of vibrant retail business activities such as restaurants, cafeterias, spaza shops, newspaper shops, clothing, textile, footwear, hair dresser’s shops, tour operators, bus and taxi ranks, hotels and entertainment centres. Braamfontein has retailers from all over the world. A survey was conducted by gathering retail trade data from 586 entrepreneurs in Braamfontein working in footwear and textile retail businesses to determine predictors of profitability. The study found that 406 of the 586 SMMEs in the study (69.28%) were profitable, whereas the remaining 180 of the 586 SMMEs in the study (30.72%) were not profitable. Results obtained from factor analysis and ordered logit regression analysis showed that profitability was significantly influenced by 3 variables of the study. These 3 predictor variables of study were the level of satisfaction of employees with the style of business leadership in the business, use of social media for networking and marketing merchandise to customers, and the ability to check the quality of services rendered to customers by employees of the business.