Giovanni Ravazzotti’s Italtile shutters stores as crime surges in South Africa

Key Points

• Rising crime in South Africa has forced Italtile to close or relocate stores, increasing security costs and impacting operations.
• Italtile’s trading profit rose 3% to R1.18 billion ($64 million), driven by efficiency gains, despite weak consumer demand and rising costs.
• Competition in tile manufacturing and retail is intensifying, with oversupply and aggressive pricing squeezing margins in South Africa and neighboring countries.

Italtile, the Gauteng-based retailer and manufacturer of bathroom and home products led by South African businessman Giovanni Ravazzotti, has been forced to close some of its stores due to rising crime in South Africa. It has urged the government to take action, saying that crime has not only affected its operations but also increased costs related to security. In some cases, Italtile has had to relocate or shut down stores in unsafe areas to protect customers and staff.

“The cost of combating escalating crime in South Africa continues to rise. Ensuring that our customers, staff, and stores are secure is a primary concern to management and a growing expense to the business. As criminal behavior and illegal activities flourish, we are continuously committing significant effort and investment to bolstering our security ecosystem, including in extreme cases, relocating or closing stores in unsafe areas,” the company said in its recently published interim financial report for the six months ended Dec. 31, 2024.

Italtile sees profit gains on efficiency

Despite these challenges, revenue from group-owned stores and entities remained steady at R4.78 billion ($260 million) in the first half of its 2025 fiscal year, compared to R4.79 billion ($260 million) in the same period the previous year. The company’s trading profit, however, rose 3 percent to R1.18 billion ($64 million), recovering from a 17 percent decline in the prior period. Basic earnings per share (EPS) increased 4.5 percent to R0.706 ($0.0384), while headline earnings per share (HEPS) grew 4.3 percent to R0.7 ($0.0379).

The improvement is largely attributed to better performance in its Retail and Import divisions, along with stronger results from its Ceramic business. Over the past two years, the company struggled with underutilized manufacturing capacity and rising costs, which hurt profitability. While these challenges persist, operational efficiencies and restructuring efforts have helped Italtile adjust to the shifting market conditions.

Giovanni Ravazzotti’s Italtile navigates tough market

Listed on the Johannesburg Stock Exchange, Italtile owns well-known brands such as Italtile Retail, CTM, TopT, and U-Light, making it a key player in South Africa’s retail and construction sectors. Founder Giovanni Ravazzotti, who established the company in 1969 and holds a 56.46 percent stake, remains one of the country’s wealthiest business figures. In 2015, his net worth was estimated at $330 million. The company’s resilient performance in the first half of its 2024 fiscal year kept its total assets, equity, and retained earnings stable at R10.14 billion ($550 million), R8.06 billion ($437 million), and R4.54 billion ($246 million), respectively.

Commenting on industry trends and its strategic response, Italtile noted that competition has intensified in both tile manufacturing and retail, with new production capacity expanding in Zambia, Zimbabwe, Mozambique, and South Africa. The sector continues to grapple with excess supply and weak consumer demand, creating a highly competitive environment. Overstocked retailers, wholesalers, and manufacturers have led to aggressive pricing strategies, putting pressure on margins. These challenges have been worsened by high input costs, including energy and imported raw materials.