Local focus and cash sales set Mr Price up for a festive season

Unlike other retailers, the company doesn't have to worry about offshore disasters affecting its balance sheet

- THE FINANCE GHOST

The JSE and even the rand have a good story to tell this year, not least thanks to the incredible strength in the gold mining sector.

But a decade or so ago, corporate management teams were doing everything possible to take capital out of the country as the smart money looked elsewhere for returns.

The theory of the importance of gaining offshore exposure was absolutely right, but trying to achieve that exposure by incentivising local management teams to do offshore deals turned out to be a mess.

The retail sector has borne the brunt of misguided global capital allocation. There are many examples of immense disasters, such as Woolworths' David Jones and Spar in Poland.

But let's turn our attention to a focused South African retailer that wants to win in its home market: Mr Price, which follows a distinctive strategy of focusing on cash sales in a market where consumers are desperate for credit. I have a long position in Mr Price, which I've held for a couple of months.

The rationale for this investment was fairly simple: Mr Price's share price had tracked The Foschini Group and Truworths lower this year, but it felt like one of these was not like the others.